Ann: Sino Gas - Investor Presentation , page-2

the $90m. mie are contributing towards development and production is only a loan to sge which is to be paid back in full from 100% of the profits from the first few years of production. during this period seh receives nothing.

making an assumption that it will take 3-4 years to further explore, develop, and produce gas of sufficient quantity to repay this the $90m. loan i make a further assumption that the interest cost over the 3-4 year period to mie would be in the ordrer of $25m.

so for the initial $10m. plus $25m. int. ($35m. total) mie have aquired a 51% controlling interest in sge while seh with its $90m. approx. market cap. retains 49%

it seems like seh have forfeited an enormous pecentage of their assets in order to stay afloat.

seh will receive no payment whatsoever from from any profits sge makes for at least the next 3-4 years.

in the meantime seh will have to pay the overhead costs for this 3-4 year period - where would this money come from. the first $10m. payment is to sge, not to seh.

i wonder if patersons have taken all of this into account in its vaulation ?

in any case it seems like a very, very long time frame from investment to return for seh.

any one care to comment ?

gk.