Ann: Alaska Projects Update, page-31

Agreed Spiney. It does beg the question as to why the interpretation of IW1 was materially different to that currently in favour. Is it because of the marginality of the FB location where the few metres between IW1 and IW2 could be the difference between hit and miss? or should I say, between high API volatile oil and bitumen? We all saw the pictures of the beakers of liquid hydrocarbons from the IW1 core. And we all noted the absence of any targeted hydrocarbons in the flow test a few metres away in IW2.

So perhaps we do need to venture further into the revised thermal maturity fairway. And get away from the margins. I'm guessing that it is still essentially an east-west orientation, but perhaps a bit further north than PB postulated on the basis of analogous shale thermal maturity hotspots. If I interpret the ANN correctly (and that is a huge caveat in itself), the latest tests have suggested that the HRZ thermal maturity hotspot (for vapour phase) is at a less hot temperature than typical analogues. Which means shallower? Which means further north? Given Great Bear's findings a few years ago (was it Alcor and Merak wells) that failed to find the thermal maturity sweetspot in any of the shale horizons that they targeted (including, from memory, the HRZ)....perhaps that sweetspot is a narrow band between those sites and the FB lateral? Just guessing here. Whether we are close enough to sidetrack north from FB or whether the less risk approach is a new well from a new site is a good question. And whether that new site is highway adjacent or off-piste is also significant.

The ANN notes that the revised fairway is still largely within our acreage and that approx 50% of our acreage contains the fairway....which I can only interpret as it being a bit smaller than initially conceived and in a narrow band in the north of our acreage. Also noting a recent transaction that we have had with GB to acquire some of their acreage around the 'checkered' border between us. 50% of our acreage is still a huge potential prize if as DW states "The total porosity of the formation remains excellent".

While the formal FO of the HRZ is deferred till this latest analytical technique is applied to materials from regional wells (whatever that actually means)....I can only imagine that industry would view the HRZ potential a lot more positively than us rank and file LTH's. Our view is tinged by the history of recent drilling outcomes and tinted by investment hrizons that are typically short. O&G players, on the other hand have the luxury of time and a clear focus on risk vs reward. If the science from IW1, IW2 and now the various enhanced testing has derisked the next drill (by eliminating some previous unknowns, or at least providing theories based on in-situ data rather than analogous data) ....then I can only imagine that the interest will heighten with more analysis. Assuming DW is playing a straight bat with his comms to us, he would not hold out from the unsolicited offers if he believed that solicited offers would be materially better. At least that is what I am banking on.

Even if there was nothing substantive and materially new in his announcement about the conventional FO, the HRZ news is significant and material. IMO. We know that there is still life (to varying degrees) in all 4 of our Alaskan plays. I was not confident of that prior to the ANN.

All IMO and GLTA.