Ann: Conventional Prospectivity Review Complete & Icewine2 Update, page-169

Hi Duds - I get where you are coming from, but I tend to fall in the camp that also believes the upcoming flow tests are pretty much make or break for 88e investors. I suspect the BoD see it pretty much the same way which is why they changed from 2H to 2V. It significantly derisks the likelihood of getting a poor flow result by giving us 4 shots at it from the same well. We know from the 4 Achilles heels ticked off from IW#1 that there is that there are lots of pores filled with hydrocarbons, in the form of volatile oil and wet condensate, sitting in shale with high permeability and with a rock structure that shows a brittleness that should be amenable to fracture stimulation (based on analogues). We also know there is an excellent bottom seal and approx 40%overpressur in the pores. So everything points to a positive flow test - but it still needs to flow from 2V.

If it doesn't flow, the question is why not and who will fund the ongoing appraisal of the acreage.I don't doubt that someone will return in later years to advance the appraisal, but it is unlikely (but I guess not impossible) that 88e will be in a position to raise the funds to do so. Any major could pick it up for 'scrap value' if they wanted to after 88e abandons the leases.

I don't think any of this is likely, but it is possible.

Yesterday's announcement, for me, was telling in that DW signaled his preferred road map. The unconventional is the main prize and Alpha, if proven, is the means to fully unlocking this prize. With the unconventional prize, pro rata projections could mean that we have around 6.6 billion bbls of vo/wc in the expanded acreage of which approx 58% or 3.8 billion bbls would net to 88e if we take up our 30% buying option on the BEX acreage. Any gas or heavy liquids (if commercially viable) are over and above this. Also any thickening of the HRZ in the Eastern flank as well as any prospectivity in the HUE will just bump things upwards.

I can't see a broader JV announcement before 2V unless DW/PB are genuinely concerned about a poor result from 2V. In my mind, partnering on the HRZ must wait till we we get contingent resource or better status on the HRZ around Franklin Bluffs. 2V may give us that (along with some vintage well data).

Potentially we will see some type of partnering or funding with relation to Alpha, as there is nothing stopping us drilling a sidetrack to test Alpha, from the IW2 well after the 2V tests are done. Other than funding of course. If the money is lined up then we use the rig while it is still there rather than suspend ops till next winter.

So long story short, no real catalysts exist till 2V flows and a dire outcome there will be dire to the company as we know it. However, given what we know and what it seems that DW/PB know, this is highly unlikely. If it is successful then we move on to creaming the curve. It appears that Alpha may be our ticket to doing that.

All IMO of course.