Ann: Quarterly Report Ending 30 September 2009 , page-5

re: Ann: Quarterly Report Ending 30 September... HIGHLIGHTS
Adelphi has successfully farmed out the Sugarloaf AMI and will be substantially freecarried
through three stimulations of existing horizontal wells and three new completed
and tied-in horizontal wells in return for farming out up to half of Adelphi’s 20% interest.
Preparatory work on the stimulations of existing horizontal wells has commenced at
Weston – 1H, Kowalik – 1H and Kennedy – 1H. The first stimulation is expected to
commence in November 2009 and planning has commenced for the 2010 drilling
program.
High levels of drilling activity and leasing of land continue on trend to the Sugarloaf AMI.
This activity is primarily focused on the Eagle Ford Shale which is evolving into a
premier shale play in the USA – in part because of its exceptionally high liquids yield.
During the quarter the majority of the funds from the Block 7 sale were received from
Mitsui, with final settlement of this transaction expected to occur shortly pending
finalisation of a number of administrative matters relating to the sale.
Yemen Block 74 2D or 3D seismic will be acquired early in 2010. A new prospective
trend has been identified adjacent to mature source rock and will be the focus of the new
seismic. Drilling is expected to commence in late 2010.
Adelphi’s current cash position is $5.5 million following receipt of Block 7 sales
proceeds.