Ann: Appendix 5B and Activities Report, page-20

Max,

In post # 14651734 just the other day you wrote"
"They will have a strong Qtrly report

Reply from GUY GOUDY:

Hitting production highs, cash flow positive, have cut costs by 50% and Directors are buying stock. Unfortunately the price of oil has collapsed by more than 60%. "

I take it that clearly you feel this is strong Qtrly report and that the collapse of oil price by 60% is the source of all woes. Most certainly a contributing factor. (I think you also may have said that AKK has no debt - which I think is more accurately said as No Net Debt - they do utilize a loan facility (to the tune of $406,357) and further cash is being injected by Lanstead.

Very specific number for production 34,050.8 BOE (or 330.23 boepd). They don't break it out much now do they - be able to get the exact numbers early Feb for EFS from TXRRC. How much of that was HK's? (yes I know it says net to AKK but the farm out takes it right back off them until APO). Wouldn't shareholders like that explained in detail - since its their biggest production.

We can say the cash G&A/BOE = $24.79. Above my pay grade to figure out what the LOE/BOE and production taxes are. Guarantee you it is not $2.90. Perhaps the taxes are the $98,791 number and its $2.90/Boe in taxes - but since taxes would be around 7.5% that implies sales price of $38.67/Boe - kinda low. Lower still is if you take the product sales number for the Qtr and divide by production and that is $28.13 - and obviously you can't do that as one number is production for the Qtr and the other is cash received (and not instantaneous monetization of production).

Are you really that much wiser after this Qtrly? Do you know the Cash Margin that they can work to at each property?


Ask the hard questions and demand the details.


Did you look at the Reserves update? Big jump in 1P PD in EFS (to be expected), big drop in PDNP in Miss (not expected). No NPV10 or price deck.