Ann: Thailand Operations Update , page-7

To add some balance to my last post, bear in mind that the JV issued guidance of a 15,000 bopd target a couple of years back. They never reached that level of production. At least not yet.

There are still a number of issues that are of concern to me. The fact that all drilling for the time being will be done with one rig means that any hiccup with the rig will quickly undo any short-term production gains. It had better be a great rig in great shape. And I hope they have contingencies.

There are also the geological issues that Onceover laid out recently, the water cut graphed in the CVN's recent presentation and the extent to which these issues are reflected in the latest reserves upgrade.

Wouldn't the recent reserves upgrade already account for most of the production issues they have had (at least with the more established producing areas)? Page 14 of the presentation shows the water cut reaching a fairly high level between Apr-Oct 2009. They've now been drilling these volcanics for around 2.5-3 years, so shouldn't all the extra data each year add to the confidence of the certifiers in reaching their conclusions? Can someone with more of an understanding of reserves certification shed more light on this?

I also tend to the view that as they increase their portfolio of producing wells, and continue to improve their understanding of the various producing areas, the JV should see a relatively more stabilised production profile. More wells over time will even out the variability of individual wells.

At least that is my expectation. But there are obviously endless other issues that could arise to defeat my confidence.