Ann: Kanaka 1 Lifts Confidence in ATP 813P Galile, page-8

re: Ann: Kanaka 1 Lifts Confidence in ATP 813... SI,

I think they were actually expecting more coal from 814. Much more. That area is known for having several coal measures overlayed on top of each other. The sapphire well drilled through, was it 80m of coal???

The target in 813 is Betts Creek.

The net coal figure is impressive in comparison to the gas content. I am sure that this is the main factor in making this resource economic at present due to the low gas content. I think last time they also reported a density cutoff, which is important relative to the assumptions for GIP.

They could have made comments on the permeability as well as the saturation of the coals. I think from the previous ann (was it carolina?) they indicated that there was pretty decent cleating on the coals but I am not sure if they assessed the perm? They also didnt indicate what stage the desorption isotherm was at and whether they expected RAW gas content to increase slightly.

The important thing here is the net coal that they intersected as well as the lateral extent of the coals. These two factors could make this an economic resource with the right drilling techniques despite the low gas contents.

I also note they mentioned that others were drilling. This is consistent with my comments on the need to achieve critical mass and I think that partnering/merger is highly probable if others can confirm their resource also.

Cheers,

SF