Ann: Permian Basin JV Extends Strikes US Strategy, page-4

re: Ann: Permian Basin JV Extends Strikes US ... With the new asset acquired, there is a strong likelihood that we will be looking at another CR to fund its exploration/development process. This doesn't necessary impose a negative overhang on the stock as the derisking of a good asset can more than offset the dilution of the CR (assuming we get diluted that is). They do enjoy some additional production from the acquisition, but nothing significant to speak of.

With regards to the back-in agreement, it's fairly common with PSA's in countries like Vietnam and various African nations where the national oil entity reserve the rights to back-in a certain porportion minus sunk cost. Simple deal really. We are paying a bit extra (about 7%) in risk relative to returns, but we are farming into a fairly low risk, high return asset.

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