marquis/block21/6b details, page-5

re: "regal" and the quality of management Spawk, Salty et al

Salty thanks for the brief background...sounds like a debacle of monumental proportions. Those sort of situations are a good lesson for us in relation to the importance of management credentials and track record.

I feel fairly comfortable with EXR as I know the background of the CEO and feel there is good governance. They have attracted very well qualified specialist personnel and that is also encouraging.

Risk management should be a significant part of the strategic thought processes at oil minnows. Someone from the audience at the Sydney presentation yesterday suggested that the favourable terms associated with the Jaguar prospect has provided EXR with a valuable asset (the 40% largely carried interest) with which to contemplate asset swaps to build a more diverse portfolio of interests. Although it is tempting to preserve all of the 40% of Jaguar, I for one would like to see a swap of say 15% of their holding for another prospect due for drilling in the next 12 months. When it was mentioned, there appeared to be some recognition by Russell Langusch that it could/should happen. Maybe they are already considering it.

regards
DF