any oilers got information, page-2

Sorry for the delay in replying. Like most people, I did not expect an after hours announcement. It also means I cannot ring and clarify a few things.

There are number of things of interest in the announcement:

1. The upper section did not flow hydrocarbons.

2. They believe this was possibly due to formation damage during drilling. This can happen (i.e. WPL/HDR's Tiof test flow).

3. Logging indicates that the upper reservoir formation is similar to the already tested lower zone. This is positive.

4. A side track is the prefered option to seeing what is in the upper zone.

5. I am not sure of the flow testing instrument used to test the well. Sidetracks are at a much sharper angle to the original well and these appears to be some concern about it getting stuck. They intend to obtain core from the internal so that they can run permiability and porosity tests. This will help them work out how fast the reservoir can flow.

6. No matter what the results they will need to drill additional appraisal wells next year before they produce.

7. The upper gas-bearing section is 5 units totalling 36.6m, Vs 2 units totalling 39.5m for the lower section. This is good.

8. Don't forget that they have already detected gas in the upper section. The flow rate is the issue.

9. Both partners appear positive and are, I believe, doing the correct thing.

10. It has been a set back, but it is not a duster. The lower zone appears economic based on the flow rate and pressure and the upper zone does contain gas but we just don't know the flow rate.

Hope this helps. I will contact Ian W tomorrow though HC to confirm these.

I would expect the sp to fall slightly on Monday. If it takes 6 days to do all of these things, Monday will be day 3, so by Friday they will be starting Grayling. So the fall may be brief.

G