yellow4, page-2

re: yellow4 response I have spoken to Warren Leslie personally and spent 20mins on the phone with him on Fri afternoon. (mind you, this is not a hoax, as anybody who knows about share investments and responsibility to share holders for a publicly listed company will know that at least a company secretary can be directly contacted via a companies direct contacts. EPE's is listed in any company profile on any CHESS sponsered Share Website. Therefore when I made the call on Fri and was told that Leslie will speak to myself personally, I def. was not going to say no...)

Obviously, Yellow 4 has been a frustration, both to shareholders and also to the company and its directors. However to sum up that conversation, Warren was very cautious but extremely firm that the Yellow Creek fields hold Oil. Infact, he remains firm to the original calaculations of about 5.2 mil barrels I believe. However, in hte original annoucement to the public, there was SIGNIFICANT oils shows in the rock and shale extracted specimens (ie. there is DEF oil in Yellow 4 according to those specimens) BUT even to this date, the UPDATE is that the intruded water and also the pressures of the surrounding water means thery are still only extracting water about 8m (from 5m in the previous announcment) from the Well Opening.

This is happening slowly as they do not want to dislodge the structure from any high pressures of intruded and extruded waters. One certainly he said was Yellow 4 is NOT cash negative... elaborating, this means that the operating cost of pumping the water out of that well is minimal, and covered by the sale of the barrels of oil being brought up at the moment. Therefore, if it was not costing the company any $$$ and if it takes 2 more weeks or 3 more weeks, then that is how long it will take. And since they are STILL working in an area about 8m from the Bore Hole, there simply is no answer yet to give to the public.

For any who have followed the JERUK discovery by Santos, they will know that despite the huge media coverage on the discovery, there are SIGNIFICANT costs with drilling and recovery methods involved in extracting that huge reserve....

I believe that is what is happening with Yellow 4 now. Obviously, the company and Warren is disappointed with the time it has taken, (as anybody would) but I felt there was genuine determination and structured plan to extract what his engineers believe is DEF oil in the YellowCreek fields. If it takes 2 holes, 3 holes, 4 holes, so be it.... and it is simply too early to say for Yellow Creek 4.

From an investors point of view, you have a share price which does not account for the prospects of YellowCreek at all currently, the affirmation by the company director and his engineers that there IS oil in Yellowcreek fields, and possibly in YellowCreek 4 but current difficulties making it delaying the result, the SMEGSY productions will keep the cash flow coming in until further future discoveries in Yellow Creek, and even sooner in a few weeks when we get the final result from Yellow 4.... nobody has a crystal ball, but the potential upside Vs downside at the moment is extremely healthy. At these prices, if you wait till the news arrives, its prob too late to get in, as the stock is known to move fast.