Good points TaneNui.While we have an idea of the drill costs we...

Good points TaneNui.

While we have an idea of the drill costs we hav'nt seen a cost for the ongoing testing at Paloma.

My gut feeling is that the $16M we had at 31/3 will be nearer $8-$9M for 30/6. The major cost in this period being PD-2 and P-3. Fortunately the income from NSA pays the company overheads so the bank balance only has to cover active programme expenditure.

Given we have PV up next that should'nt be a big draw as wells are shallow and therefore cheap. Maybe $3M for a three well programme and testing.

Offsetting the cash draw is the fact of the option income as discussed already. ($2.2M in the next 5 months, $1.9M in 2013). I expect if we get the kind of results we are all hoping for at Paloma we may see all three wells in production. P-3 as early as three months time from testing completion. PD-3 tackling the Fruitvale and/or Lower Stevens ($1.8M per quarter) and PD-1 tackling the Antelope zones or higher zones.

The next capex after PV is the seismic in Indo which should easily be covered by production income by that stage.

Vietnam is of course a free carry for the first two wells and seismic.



With all three in production Paloma would not only be self funding but would contribute to other projects.