Ann: Operations Update, page-41

It's been stated that this is the best shale reservoir in the world, that it's the best shale Basinski has seen. It has been described by management as 'amazing' and 'extraordinary'. Coming across a project like this has been described as a 1 in 10,15 year event by DW, PB, and SS. The words 'Tier 1 play' have been used when describing the reservoir. Management have more or less said with 100% confidence that the resource is below our feet, not only billions of barrels of oil estimated by both DeGolyer & MacNaughton and 88e/Burgandy, but oil in a volatile phase across our acreage, aka - the sweet spot. Ken Peters, and experts from Houston have agreed with the managements thinking. Basinski has been working on this project for 7 years, he was meant to be retired wasn't he?. It has been said that our reservoir can flow at high rates. Management have stated that the rocks in our reservoir are susceptible to fracture stimulation. We've bought much more land, we don't want to leave anything on the table. You will struggle to find a resource like this in the West - said Basinski.

All this and we haven't seen a fraction of Basinki's optimism.

How can all the above statements and actions lead to this being a failure. How can an assumed respected company say this is the best shale reservoir in the world if it can't even flow at an economical rate. They surely think it will flow at high rates - hence stating it's the best reservoir in the world due to having great characteristics. How can Basinski state this is the best shale reservoir he has seen if he doesn't think this will flow, surely you have got to be pretty sure it's highly likely going to flow before making a statement like that. Let's face it - it's a crap shale reservoir if it doesn't flow at an economical rate, and therefore it will be one of the worst shale reservoirs in the world.

Basinski clearly believes this will flow like a dream. 7 years working on it, stating it's the best reservoir he's seen and that isn't even a fraction of his optimism.....

Either we are being truly mugged off here, and Basinski is playing a 7 year long joke, or we are at least 95% going to flow based on what has been said.

The 50:50 remark does not add up with the many optimistic statements that have been made, and I believe Dave Wall is understandably trying to keep the share price under control, as if they stated what they really thought, what their true optimistic feelings are - then this Share Price would probably go to the moon before flow results.