Ann: Operations Update, page-168

It's interesting how much the various types of investors that make up 'the market' hang on the wording of an announcement - and how many different interpretations can be deduced from that exact same announcement. Whether or not the words were a deliberate softening up or a breadcrumb for the researched or just a clinical statement of the facts are quite frankly all up to the individual to determine.

For me - fighting through the natural emotions that arise after every announcement and anticipated reactions - it is very simple. Progress continues as we employ technology and engineering to do what every shale play in the history of shale plays has done - and that is to employ technology and engineering to extract hydrocarbons that are tightly bound within the rock. And this rock, the HRZ shale within the modeled thermal maturity sweetspot, has never been fracced. So no one knows what to expect. Hence the 50/50. Hence the large range of modeled economic breakeven points depending on flow rates.

IMO, all that DW has said in this particular paragraph is that the results of this well will allow us to update our view (with less uncertainty) on the Icewine play (ie the 50/50 and the economics of development and extraction). Some people say this statement is bad. Some people say it is good. I believe it is a statement that implies a certainty of outcome - one way or the other. I interpret it as DW saying that the results are unlikely to be different with another well in the modeled zone, and hence 2v will be conclusive for the Icewine play. However, I do not interpret it as a foreboding of doom. Perhaps I am 'half full' but it reads to me that management remain confident that the hydrocarbons will flow and flow well, once they deal with the engineering challenge of getting the frac juice out of the way. It also reads to me that while they were hoping to have this done 'naturally', they are prepared for it to be assisted in one or more of the manner typically done in typical shale plays. They are still hoping to minimise the level of engineering required via a 6 week shut-in - but have heralded that they may still resort to post shut-in swabbing.

For those contemplating their investment - of course you must do whatever helps you sleep better at night, and only you can make that correct decision - but make sure you always ask yourself this question: what, if any, is the correlation between rate (and method) of flowback of fracc juice and the subsequent flow rate of hydrocarbons? Rely on your own research here.

I remain a confident, albeit frustrated, holder. All IMO. DYOR. GLTA.