report, page-12

re: cs energy make $2.5 mill and get the hell out yes I couldn't agree more there are some great results coming from QGC at the moment after five years of absolutely nothing. What people need to understand is that this industry is built slowly over a period of time, after the drilling of many wells. Right now QGC have 1 well they can say will make money. They need to find a second and third and forth. At that time the area surounding those wells can be given reserve status. They can produce a trend and identify those trends in the coal geology and step out what is called a production fairway which exhibits the same production profile and infill that area identified with the required wells.

The sales contracts are usefull here because they can take the small amounts of gas produced. Don't get me wrong I know these guys are working hard and finally getting results, I am just trying to inform people on HC that QGC is overvalued now and after 60 wells and I am not sure exactly but probably $40-50 million they have 1 well going great guns and 59 duds. people need to realise this and not spray numbers all over their posts as if they are conventinal gas reservoir reserves and the hard work and risk is behind QGC. In fact it has only just begun.

My warning on CS is that they would not sell at a price that only just gets their money back if they could see huge potential, they could have signed a contract without the risk of direct investment before. I would suggest it is sweetheart deal to keep the contract, because it doesn't mean anything to CS if QGC can't deliver, but take CS out of it's equity position thereby everyone saves face. QGC do not have the money to be buying properties for this much because now they have no money to develop the vital wells to increase production. But if they lost the contract they would be in a position where the market lost faith in them so they would even worse off.

I just don't want everyone to get excited over numbers and not understand the real process of making those numbers real.It will take another $50 million and 100 wells to make it work before any profits are even dreamed of. And probably 3-5 years

Everyone should be aware of this.