cue resources, page-21

re: oyong delay Hi Collingwood

Santos 2ndQ report yesterday. pg11/12.

Santos re-tendering for barge. Apparently, in Indonesia, if you first tender choice falls through you have to go through the whole process again. Considering how desparate Indonesia is for oil, this is dumb. It also raises a lot of other questions.

Has the barge been started and problems have arisen during building ?
If so any legal consequences and have progress payments been made which may/may not be recovered ?
If barge not started, did Santos really ponce around for nearly a year instead of working to a short timeline for a solution, and then moving on if none available ? If you can't solve contract negotions in one month what makes you think it will improve in 12 months ?
If the above is true Santos are incompetent.
If the above not true what is Santos reason for delaying ? Do they want to take on the Toods or are there more problems with Oyong ?

The gas was supposed to start 2007, yet now told FEED not even started. Much less gas than thought ? Reserves have gradually been reduced from about 130bcf to 90bcf already.
If Oyong is still commercial what does 2Q 2007 really ?
mean ?
Cue need money for:-
Maari poss $20 mil
Barge for Oyong X mill
Gas development was $12 mil
Drilling 12 months, inc poss 2 expensive Jeruk wells.

Possibly over $40 mil. Have $30 in cash. Bit of cash flow from PNG. It's tight.

Not even worth talking about appropriate disclosure.

I couldn't work out why no short term loan to tide them over recently. Cash flow from Oyong was said to be so close, Sept 2006. Then two days ago Bob Copin aluded towards end of year. Now look. Santos are liars and now I think Cue are liars.
It may be a simple case of massive incompetance or someone is playing games (which could ultimately bennefit shareholders). Either way I work on fundamentals, and you can't do that if you don't trust the information to a certain extent. Cue still have a lot going for them and I will probably regret selling (again !).
Rgds and good luck with them.