notes from agm

Hi Folks,

Sorry about the delay, but here's a few notes from the AGM. I won't attempt to cover everything, but it was well worth attending as I'd never seen or heard Ted Jacobsen before. Came across as very meticulous, objective and astute.

Infrastructure currently constraining prodn to 4500 bopd now, will get to 5000 in Dec, 6000 in Jan.

OPEX is USD6/bbl incl transport.

Royalty. Will be above 5% [Sliding scale 5 to 12.5% previously stated]

Tax. Super profits tax. Complex. Still trying to get there heads around it, esp as to where the envelop is drawn around licences.

Tax losses. Also complex due to murky history of previous JV, but will have a lot.

POE 9. Discussed this slide a bit, as an example. Was adamant that it was now producing from the matrix rather than the fractures, that it would produce at a steady rates for a VERY long time, scoffed at early outside speculation that it would have watered out quickly. Fractures are huge, eg up to 1m gaps, yet it seems to be the matrix that they are most reliant on.

New Permit. Reckons reason sole bidder was that it simply went unnoticed. Doesn't yet know whether it will be a sandstone or volcanics play. Will try reprocessing existing seismic, new seismic very expensive, big permit and not sure where to start, so may shoot aeromagnetics first. Although they epect to drill much earlier than the required 4 years, it doesn't sound like we should hold our breath on this one.

Indonesian Permit. Appear very pleased to have picked this up also, esp with such light committments, and with the relative difficuly of picking up Indonesia permits. Only interested in one corner of it. Already had people wanting to buy it off them.

Bo Rang. Quite excited about this, couple of wells early next year.

Si Thep - mid 08. Appeared confident with both this and Bo Rang given the results of the previous wells. Saw as appraisal rather than exploration.

WB Deep. VERY excited about what this appraisal could deliver if successful. Very guarded about how big was possible. Well this Quarter.

L33. 3? wildcats in Q1. Theres a big structure they'll drill without seismic, as seismic expensive.

Other zones. Mid 08. Need a lot of planning, due to mud losses etc. BR,WB deep,L33 higher priority.

Carnarvon permit 399. Very much an "I like", rather than "we like".

New ventures. Looking at some quite big stuff, but being very disciplined (and cagey!).

New reserves statement. Expected towards the end of Q1 for 31 Dec.

In summary I liked what I heard, esp the program for BR, WB deep, and L33 over the next few months, but also the "other zones", and Si Thep testing further into 2008.

As a result I topped up 20% at 48 yesterday (very expensive having shed these at 14/15 ish in Aug). Now have 80 of my peak holding, and you"ll need a crowbar to separate me from them.

EL
PS Apologies if I have picked up the odd thing wrong, no apologies for ommitting a lot of other stuff (mostly well covered in the slides)