Ann: Charlie-1 Confirms Large Condensate Discovery, page-143

Morning all,

Well i've had the time to review my thoughts and emotions around the failure at Charlie. Yes, I believe this is a failure and no amount of gloss from the company can hide the fact.

Firstly, its really disheartening to read of the losses some have incurred, no one likes losing money at the best of times and i hope everyone is in a good place personally. Warnings were given regarding how destructive things would be on failure, then the company are so bullish about how this is the drill they've been looking to drill for 3-4 years and boast about the quality of the play.

Secondly, it's my understanding that when the farm-out to Premier Oil was completed for USD$23 mill, they reveiwed the state of the art 3D seismic inversion package and determined that the location of charlie 1# should be moved slightly. They were paying for the drill and as major partner deemed this a better location to target the Torok conventional play.

Yes, 88e were the operator but i'm unsure of how much influence they had in determining the location. So I don't hold Dave or the 88e team responsible for this. This is much like the Winx situation where Otto located, 88e operated and the majority partner. So essentially the Charlie 1# drill for Premier was like our Winx, a low cost punt. Albeit supposedly a better punt though.

Thirdly, despite what the company has announced as a commercial condensate discovery, there will be no condensate commercially produced by 88e at this location. There is no infrastructure, there is no committment as of yet to build any infrastructure and it is well beyound the means of 88e to finance and build any infrastructure. So commercial or not it is a standed asset. IMO of course.

Premier took a punt, have walked away, it has cost us nothing except the seismic and we have gained some data. Whatever the data shows will be revealed with a shine on it.

The Cenkos report states "We would suggest that Charlie-1 could be abandoned in such a way that 88 Energy could potentially
re-enter the well in the future, including a potential sidetrack to test the potential of the Seabee in a more optimal location". I'm not sure what this means both from our point of view and the SoA/DoG requirements and needs to be explained by Dave. As the Charlie 1# well may cost 88e nothing, Premier have probably spent +USD$20 mill. So for 88e to return and drill another well they would need to raise these funds themselves(hard to imagine another partner coming in at this stage to prove a flow test on condensate) and I can not envisage the market stumping up another +AUD$35 mill.

Fouthly(is that a word) There needs to been cuts in the across the board starting at the top. Daves package to far to larger and has only ballooned in the face of failure. He may run a good ship getting the funds and team in place to run these drills but ultimately success is measured by the sentiment in the market and the return to shareholders. Dave has previuosly seen his salary appreciate on the increasing MC, now is time for a correction, 70% reduction for all and a scrapping of the incentive scheme. This needs to be re-incentivised.

Fifthly(again is that a word) A plan that is clear and achieveable must be revealed to shareholders to move this company forward. Forget this "soft HRZ farmout" talk, forget this "potential" drill of Yukon etc. I'm sure there is a plan, there always is but is needs to be one not covered in gloss and spin.

I'm sure there are mose issues rolling around in my head, but i'll be logging on to the AGM and if there is a Q&A it should be interesting. They are probably fortunate it is closed.

Of course all of the above are my views and opinions only, although frustrated ones at that.

Cheers all, be safe.