kowalik encounters 50 foot flares, page-56

Hi Estseon,

Agree with the fact there will be long term investors wanting to either take some profits off the table at a later date or just sell up into strength. A few people I know who have been in the JVP for a long time tend to have a bit of that attitude.

I think though that once it does bounce...say on news of both Baker 2 and Kowalik producing at good rates then they will be reminded of why we invested for the first place and its not just for a few wells.

Also agree that we will really only see a decent re-rating once we have a few wells on production and I think for ADI that 2009 will be a great year if things pan out the way we hope:

1. All 4 wells in current program are commercial in zone 1
2. Zones 2 & 3 provide significant reserve upgrades
3. More rigs are mobilised in early 2009
4. For ADI there is also Yemen - Looking forward to them announcing how the analysis of the 3d's are going

Zone 2 is producing now at Kennedy and the next vertical by conoco may shed some light on zone 3 and the potential of zone 2. Kennedy will only be worked on at the end of the 4 well program of if they get some better indications of how to frac the rest of the horizontal from the conoco wells.

At this point though we should get a nice bounce on Kowalik being commercial particularly if it has better than expected flow rates...over and above the 2500 bopd would be nice!!

We will be looking at a significant re-rating on zone 1 itself if information comes to light that we will be working on around 100-120 acre spacing for wells as Agent suggests. Still none of that will come out for a little while yet I imagine.

The current broker reports are based on what we believe are conservative flow rates so it will be interesting to see what Kowalik can do...guess we should know in a few weeks time, if not sooner depending on how close we are to TD.

Still looking good though as Kowalik has been reported by Agent as still flaring through the weekend. The further they get through the horizontal the more fractures the well bore will be exposed to and it should assist in reducing the decline rate whilst increasing the overall life of the well.

I also wonder when Conoco will really show their hand and my comments above regarding the pipeline is that they may be close to cleaning up some of the other wells and getting them producing...I'm not sure how long it will take to get the pipeline in place but things are now obviously progressing to a plan. It will be interesting if the additional rigs turn up for conoco as that will be a great sign that they are heading into full on production.

All to play for at the moment, time will tell, I'm happy to wait it out :-)