Ann: Quarterly Report & Cashflow, page-32

Hi Luciano,

"Would be stupid to give back to Exalo a rig in better condition for free, after the disservice they cause..."

Exalo own and operate the drilling rig. Services such as wireline, LWD etc are handled by service companies not the drilling company. Exalo have been giving us pretty good service to date.

Re costs of rig upgrades and maintenance......most of cost of same would come out of the rig day rate being paid by IVZ. That said, often clients will help with upgrades for SBM mud systems and other modifications that are specific to a drilling program. Often it's a case of being cheaper shelling out a bit of money before a well to do upgrades and mods rather than ending up paying larger amounts due to rig downtime (in a worst case scenario losing a well).

Most of the aging offshore rigs that come into Australian waters are in bad shape having spent time working off Africa and Asia and clients will often assist with getting the rig up to spec so it passes a safety inspection. Again cheaper to spend the money getting the rig in shape rather than waiting months for the drilling company to get its proverbial together and fund the work themselves.