Ann: Rights Issue Shortfall Notice, page-36

“With such modest Rights Issue proceeds Petrel will now focus on a non-funding position in the Uruguay assets or potential sale of its project assets to cover unpaid liabilities”.

Ultimately a deal will have to be done to move forward and that will either be a new partner or the sale of assets which was always going to be the scenario in the absence of funding from the CR. I firmly believe Management with a touch of bad luck are responsible for the current position but shareholders could have eased the situation and aided their investment by participating in the CR. IMO a deal will be done. Unfortunately I doubt the terms will reflect a strong negotiating position given our lack of cash! I am not suggesting the situation is the result of lack of participation but had say 50% of the CR been taken up we would be in a much stronger position to pay our liabilities and/or bring a new partner into the project whilst retaining a respectable share.

I guess only time will tell how this will all play out.

Good Luck All