Ann: Chairman's Letter to Shareholders re AGM, page-44

re: Ann: Chairman's Letter to Shareholder... NHC already has an O&G subsidiary - Bridgeport energy - as a convenient vehicle to pursue its ambitions of generating more revenue from O&G - to balance the poor outlook for its thermal coal operations. NHC's growth in this O&G sector is most likely to come from mergers and acquisitions and not organic growth. Its Bridgeport investment was acquired. Now it needs more acquisitions to grow quickly in the O&G sector. It has about $1.1 billion to invest and who knows what borrowing capacity. It did well out of its investment in Arrow and subsequent sale to Shell.

It now has a strategic stake in DTE & WCL and very close management relations through Rob Neale being new the chair of both boards and having been MD of NHC for so long and a member of SOL's board. Both DTE & WCL are undercapitalised to achieve their development ambitions. A great position for NHC (a subsidiary of SOL) to come in as the white night when both DTE & WCL run out of cash and need to do their next capital raisings. A bit of Board dithering at the right time would leave the companies little option than to take NHC's apparently generous proposals. At some stage WCL & DTE are likely to be engulfed by NHC. NHC is hardly likely to pay too much (no record of doing so) and it is far more likely that the shareholders of both companies will be done slowly by NHC.