a special message for scott and david

MOST READERS - PLEASE IGNORE. This just for some fellow investors David and Scott.

Clarifying what I said about the flow rates and reserves and the timeframes:

- I believe the August reserves upgrade will be excellent. I am expecting 2P reserves of over 2,000PJ to ESG. This puts ESG in the range of 2,000-3,000PJ which is where Arrow and QGC went up the foodchain.

- Regarding the non-release of flow rates - this is NOT because they are 'poor' or disappointing to ESG or Santos or others. It is because massive coal seams which are going to be producing for 20 years ramp up slowly. So releasing the flow rates so early on is not going to excite the (retail) market. In December 2009 ESG released flow rates from the Namoi seam because it is the thinnest seam and as such produce high flow rates much earlier.

Again, ESG have said all pilots are performing well - better than their models have predicted - but to reach peak flows takes years. There is a difference between what will disappoint the 'market' and what is exciting news to the gas boffins at Santos, BG or Shell. They can work out the value (and then act on that information) based on early results. But without the model, retail investors are not going to realise the significance of the numbers, so ESG don't release them.

Peak flow rates will be achieved some time down the track. But it will not be ESG who will be running the show by then.

- Timeframes - But, importantly, this DOES NOT mean we have to wait years for reserves or for significant share price movement. Reserves have and are certified well before peak flow rates are reached.

IMO, the reserves upgrade in August is the key price catalyst, and the key catalyst for corporate action.

Regards,

Yaq