appropriate value? $1-68??, page-36

The announcement today is unfortunately a bit cryptic and naturally brief. I have done some further reading to work out what the "contractual obligations" and "supply agreements" could be referring to.

The 2008 annual report refers to the supply of gas for Longtom which is to commence 1st July 2009 at a contracted rate secured by a letter of credit capped at $60m. I am wondering about the Longtom works and whether the delays caused by the administrative appeal issues etc at the Santos end...or the contract to lay the pipeline/umbilical to Patricia Baleen (due March 2009) is the source of a delay which is requiring some adjustment to the arrangements.

I also note that the financing arrangements from Bank of Scotland for Longtom are complex and may well require review as part of this sale process.

Finally, the latest quarterly report refers to contractual obligations for drilling of wells in the AC/P23 permit as follows:

"Well equipment will be delivered during early 2009 for the commencement of an initial two well drilling program scheduled for mid 2009. The initial drilling program includes a well in the Octans area of the Crux field and exploration drilling on the adjacent Auriga prospect."

It seems to me that the drilling in AC/P23 will have significant expenditure obligations that may be problematic given the time it is taking to resolve the asset sale process. Therefore again, review of the cash flow implications may be required.

All this (and perhaps more) seems likely to need resolution in conjunction with the current negotiations without even contemplating the direct Crux project...I am certain there is plenty of midnight oil being burned.

regards
DF