a word of caution, page-18

Hi Guys,

People talking about producing from volcanics as if it might not happen due to risks. Look in the rear vision mirror folks, we are over those sort of risks. Our technical risk now is how much more of these wonderful reservoirs we might, or might not find.

Steelpig is clearly talking about a very different CVN, one with completely different board and management, a different partner, and why couldn't find oil in volcanics. THAT CVN is clearly NOT relevant to us. We've probably added in excess of $10mm to our cash position in the later quarter, and we did not get that selling water. Steelpig clearly needs to do some RECENT research on CVN.

We have wells that have paid out there costs perhaps 5, 10 or more times over, and absolutely no sign of watering out, and having to drill a replacement well.

We also don't care only 3% of the worlds oil comes from volcanics, which on about 85mmbopd would be a mere 2.5 mmbopd, dwarfing what we are achieving 200 fold. In fact I hope we have the rare luck of producing from pumice.

Steelpig sounds to me like he might be related to Intellinot, who is still waiting for a 47 tanker freeway pileup on KOT's third world expressways.

We should look at the facts that have already happened, not the risks that might have happened, but didn't.

EL