Ann: Lease Update, page-36

I don't see it as binary as you portray. And with all due respect, while creating shareholder wealth sooner rather than later is always good, I do not believe that an oil explorer should be handicapped by the need to meet short term investment horizons of retail investors and/or traders. There are plenty of stocks for those type of investment horizons....not sure an oil explorer is anywhere near the top half of that list.

I, for one, am glad that the focus appears to remain on the HRZ and that the conventional remains a means to an end. That said, I think the delay to the HRZ exploration programme, has given greater meaning to the conventional as a 'means to an end'. The 'end' appears to have encountered 'mission creep' to not only encompass financing and/or currency for HRZ exploration and appraisal, but perhaps also to include near-mid term market value enhancement for investors at the end of their tether. But, nevertheless, it is a means to an end and I am glad that the BoD seems cognizant of two important considerations:

1. Don't lose sight of the end game; and
2. Don't sacrifice too much of the value of the conventional as trade-off for speed of access.

The first point is self-evident unless and until the HRZ cause is dead (for now). Any objective assessment of other exploratory efforts into new shale plays would reinforce the view that it is much too premature to proclaim the death of the HRZ play or even the 2V test flow well, at this stage. It is more than likely that it is the market price of our shares that have led many to this premature conclusion, rather than the actual results so far. April/May will see the reopening of 2V and the recommencement of the 'pursuit of flow'. Time will tell whether or not this will be successful, and to what degree. Time will also tell as to the extent that the results of 2v are applicable beyond that well and the implications of this on the scale and economics of the potential play. This will take time and the market will love the uncertainty that this implies (not!!). But the potential prize is far too big, the potential economics is far too lucrative to compromise in the pursuit of haste.

The second point is vital, even if conventional was not a means to an end, but rather the main game. The North Slope lessons from others are clear: you don't drill for conventional without 3D seismic; once you leave the haul road, you can only drill on the tundra in winter; it takes time and money to build ice roads before you drill....and that, of course, can only happen in winter. The conventional leads have only just completed maturation based on additional processing and analysis of vintage 2d seismic data. The targets have now accordingly changed and been re-sized, and the 3d seismic acquisition plan has been changed and brought forward. The permits for conventional on the western fairway are underway, and no doubt will be amended after the 3D seismic has helped finalise the target locations. At best, 1st half of 2019 will be when the drill bit hits the tundra searching for conventional oil on our acreage. IMO. Whether we do it assisted with some farmed-in money, or whether we farm out control, it can not be any earlier, unless prudence is cast to the wind.

Oh...BTW, the recently unveiled land acquisition south of Point Thompson is very interesting. Is it an insurance policy; a prudent diversification; or something else? And was it a stab in the dark or based on some excellent skunk works analysis of vintage on acreage data and nearology data by 88e boffins? Whatever the reason, once unveiled, it may be sufficient to get the oppies comfortably into the money before the end of Feb.

Much to look forward to in 2018 as we progress the 'means' and as we continue to qualify and test the 'ends'. DW has heralded that he will kick start the year with shareholder presentations etc that will cast more light on the journey so far and the road ahead. Till then, GLTA and best wishes of the Season.