Ann: Annual Report to shareholders, page-3

One interesting fact in the report was that Lakes estimates that they are holding gas reserves in excess of $1b underground based on a price of $8.00 per g . However spot prices recently have seen the price per g rise to $40.00 and fall back to $20.00. Given that the federal energy minister has said the days of cheap gas in Australia are over it could possibly be that based on those prices Lakes could have possible reserves in excess of $3b . However the situation at the moment is very murky as it appears that the resumption of onshore drilling will not happen until next year when it was supposed to be happening now. This would not be Lakes fault but due Andrews politically appointed green bureaucracy that would be doing everything possible to delay/disrupt the issuing of drilling permits. We all know that what Andrews says and what he does are two different things so possibly he has directed his cronies to delay the issuing of permits as long as possible. On the other hand it was “leaked” amongst other things that Victoria is thinking of introducing a state gas reservation policy. Currently I am not aware of any sites that produce gas onshore as I thought that all the gas produced in this state comes from offshore which is controlled by the federal government and as such I would have thought it would be impossible for Andrews to introduce a reservation policy on assets controlled by the feds. If I am right in this assumption then Andrews could possibly be talking about Lakes and there ventures and if so he would make himself the hero in Victoria by keeping gas prices down. Lakes future? I have no idea but am still optimistic that I might get my $40 k back (invested over many years). If all the ducks line up there are massive profits to be had with Lakes so I am tipping that at some time over the next 12 months a takeover offer will be made possibly by Beach. Good luck to us all but don’t hold your breath on a change of government.