Ann: Completion of Placement and Institutional Entitlement Offer, page-78

Time to cement the thinking hat on one's head and keep it on.

1. Per Cara, it would appear the major holder has never gone anywhere and holds onto their shares ... so I expect to see Molton holding between 46.13% and 51.7% of the issued shares once the dust settles

2. Reputational Risk ... as shown by the non take-up of the Placement to institutions our BoD seemingly have a problem with attracting institutional investors ...

3. Was the advice from "... the operator of the SM-71 field" .. aka Byron Energy a "surprise booyah" or not? I mean the Rights Issue did not address it ... unless of course we use the same perspective that because it was noted as a risk (see slide 28 ... Failure to Achieve Production Targets) it is probably already "in process"). While I'm on that slide you might as well take it as a given that there will be an impairment on the carrying value of our properties due to oil price. What that means (apart from reducing shareholder equity on the balance sheet) is unknown ... BECAUSE WE DON'T KNOW WHAT THOSE DAMN COVENANTS on the credit facility.

4. Being an activist investor is time consuming. I was hoping that our earlier 249D participants would take up the challenge post CR dust settling ... but alas time + effort = money and while principles matter, one only has a finite amount of time and energy and there are more rewarding targets out there. But count me in if we it happens (revenge is a dish best served cold). Have your win for now.

5. OK so BYE has cut SM-71 to meet their forward contracts. Effectively SM-71 is now 1,900 bopd (gross) which puts the NRI at ~760 bopd (BYE has 670 bopd on forward hedging & OEL has Swaps for ~560 bopd) .... CHECK THAT PLEASE ... so on a 90 day Qtr OEL is looking at SM-71 oil revenue of (560 x 90 x $56.71) + (200 x 90 x $20) = ~$3.2M. This is using a $20/BO stress price. OEL share of Qtrly Cash expenses = $0.6M

6. What do we know we are on the hook for in non-discretionary expenses each Qtr. P&I payment of how much each Qtr is dependent on what the Outstanding Debt was Mar 31. Will it be $15M & then approximately $1.8/Qtr??? What would be the appropriate G&A (including staff) expense per Qtr ... 500K seems plenty to me. IF NO CAPEX for drilling there should be little else to pay for.

7. Is $4M/Qtr in revenue possible (so SM-71 gas + Lightning condensate + gas) with total expenses of $2.9M-$3.2M Qtr. We can survive with determined mgmt.

So who's Molton going to call on???? Surely he cannot continue to support the incumbents based on:
a) their performance on just about every conceivable metric is dismal
b) their abysmal take up of the institutional placement

Pick up the phone and call Maynard Smith. Propose a merger on your terms. There is not a single position at OEL that would be required at BYE. BYE knows its way around offshore so its easy with Talos and GC-21. Lightning is questionable for them strategically but the hard yards have been done. BYE is suffering at present too. Arguably we'll have the stronger balance sheet post CR. It might be the right time.

Put it simply, OEL (the company) is now a "redundant" space ... the strategic attribute of

is no longer a necessary attribute of any E&P during this time of restructuring of the oil market and the removal of millions of Bbls of daily production that may never fully return.