Ann: Thailand Drilling Update, page-15

Freida,

I have reread CVNs announcement of 3 March, which included the S&P attachment. I see nothing in it dividing the 20% in any way into two 10% portions. Nor do I see any provision for claw back on the basis of production.

The first tranche of USD 33 mm which we have received is referred to as the "Base Purchase Price". I see absolutely nothing adjustable about that. For me history.

The remaining amount of "up to" USD 32 million is indeed an interesting beast, described as "Post Completion Receivable", but to me reads like a capped royalty. I see no performance hurdles for this to kick in, just the rate, the caps and the end date.

I do see that Loyz announced their expectation, and that of ECO, that production would reach 5000 by Dec, but did not read of anything contingent on this.

Please correct me if you are reading something else, or if I have missed something.

I am not expecting much from the "receivable" which I suspect has been structured to give both parties the numbers they want for PR, tax and accounting purposes - quite a smelly part of the deal I suspect. Any way the first part of that is not due until next November. What we ever see from it will be a bonus imho, but the analysts are factoring it in so perhaps I am too pessimistic.

EL