questions to ask directors, page-23

I finally got into contact with John this afternoon, very nice guy and seemingly upbeat. I was under the impression that the sp didn’t really bother him too much as he said that all that has changed is the time line nothing else.

Now for the answers to the questions.

1) Projected additional costings for recovery of the pipe.

This was an obvious question that I knew wouldn’t be answered due to the market sensitive nature and that was the response I was given.

The costing of the rig is 15,000 per day a lot cheaper alternative to sidetracking. He said that a rig for that is in the order of 400,000. He stated that there was no need for this at all.

b) Probability of captial raising to fund this well or the second well.

From the yearly report there is a provision of capital raising. However it was said that depending on what the outcome of the well is the more likely scenario would be a U.S based loan, using the well as insurance.

2) Wireline results from the market release of 27/11/06

I got a similar answer to jek on this one. The wireline has been assessed by a contractor and now it has been sent with the other data from previous results to be assessed as a complete well, completed in approx 2 weeks. He said that this information was only important for fracturing rates ect etc not going to tell how much gas is down there. (im not competent in this area).

3) Progress of recovery

I asked on the progress thus far, and he said that everything has been going to schedule and would remain in the time frame suggested from the 02/01/07 report. It is a time consuming process that involves cutting sections of pipe then pulling them up out of the well. Then sending the washover pipe down to a lower section and cutting another piece. Recovery of these sections have been better than expected in the order of 200 feet a day rather than the 50 stated from the last report.

4) Increased awareness to the shareholders

I asked him about providing more information, he said that it was a difficult situation “damned if you do, damned if you don’t” Meaning that the reports released have been criticised for not having enough information, having too much information and being too hard to understand. I still reiterated that any release to state that all was going well, would be beneficial.

5) If there is environmental opposition from government in allowing for pipeline installation.

He said that this was misinformation floating around. The company won a court case for seismic intrepetation in 2002, to allow investigations in the blocks they have acquired.

The area that they are on, is ranch territory, all that is there is grassland for grazing not environmentally sensitive at all.

As for the pipeline, they will be routing along the access road using the existing water pipe permit to speed up the approvals. He said that this is a lot easier than trying to route a smaller distance “no point inventing the wheel”.

Now for choosing of the well, the reason for this was the blocks of land that they have is owned by the state and federal governments. Permits for state can only take a few days, however federal approval can take 2-3 months. The rig for the well came sooner than expected thus they decided to drill on the state block rather than having a delay for drilling on the federal block and waiting for another rig to arrive. The second well is planned on the federal block and paper work under submission.

6) IDAC report

I threw this in on sue12s request, and he knew what I was talking about and said that he received this information daily. He said that this information is very valuable to other companies whom own land in the area, so he said that he didn’t want to release this information as it would only help other companies.

The type of drill bits used etc was also kept secretive for the same purpose.


Summary I was very pleased with the outcome of the conversation; it has removed all the crap that has been posted thus far on the GDN site which was worrying. I happily hold.