dear mr chairman.

Dear Mr Chairman, 18 September 2012.

I observe that you have released the end of 2012 year financial report yesterday

I have some concerns and would be pleased if you would respond to the following.

$112,500

In particular I note that you (via your company) received an extra $112,500 over and above your director’s emoluments.

However there appears to be a paucity of detail as to why the company incurred such an amount?

I would be pleased if you would provide more details to the market in relation to this $112,500 as to why the Company incurred such an amount.

Salary increases

I observe that since last year (2011) there have been significant increases in the salaries of various senior management within the company. Mr White, Mr Haldren et al.

Given your express comment that the company did not have enough money to pay for the drilling of a second hole at Surprise and that a significant amount of company funds has apparently been spent on undertaking 3D seismic, please advise the justification for the salary increases.

The end of 2012 year financial report appears to be light on any detailed explanation.

I would be pleased if you would provide more details to the market in relation to why the company has chosen to increase salaries at this time, when no significant income appears to have been received by the company for oil sales from Surprise.

In particular would you please clarify if such salary increases are with or without any element of a bonus to any person?

In the event that any one has received a bonus as part of any salary component in the financial year just ended and forming part of the financial report released yesterday.

I would be pleased if you would advise the amounts and reason why these people were entitled to a bonus, what criteria was adopted to allow the company to arrive at the justification for any salary increase of bonus payments?.

Additional director’s fees now with 6 directors.

It is axiomatic that this cash burn is exacerbated by the fact that the company now has 6 directors and has engaged Mr Cottee at an increased salary to the previous Managing Director.

Please advise what cost savings the company has engaged in to mitigate these additional expenditure.


Relocation costs to Brisbane maybe $1 million

I observe that the report makes mention of the fact that the company is moving to Brisbane. No announcement to that effect being made previously.

Please advise the cost to the company of this relocation, where will the company be operating from and will this be a temporary or relatively permanent move?.

I trust that the company will be settled for a considerable period of time without the need to relocate at a later time ?

Sales of Oil

I also note that the 2012 year financial report does not make mention of how many barrels of Oil and or cash received from the sale of Oil at Surprise.

This particular aspect is of grave concern, one would think that a company recently endowed with the privilege of locating high quality oil for the first time in 50 years in Central Australia and who shouted that fact from the rooftops at the time, would continue to provide continual disclosure to the market as to number of barrels, and or amount of cash received.

This raises the question, is there a problem, either with the quality of the oil, and or the Surprise hole?

Rumors abound Mr Chairman, that the hole at Surprise has a significant problem , due to silting up, and or that the flow is not as good as anticipated.

Of particular concern is the fact that the company clearly is refusing to release how many barrels of oil it has obtained and sold since the beginning of the extended production test.

There does not appear to be any specific mention in the report about that particular aspect.

Figures of between 1,500 and 3,500 bbls being obtained from Surprise are being bandied about, is there any truth in these rumors ?

If the company had sold 100,000 bbls in the past 6 month, one would have no doubt the company would be singing from the rooftops that fact.

On the contrary, the silence is deafening!.

Is something is wrong because shareholders are entitled to know!

I would be pleased if you would release an Announcement to the market clarifying this situation.

Litigation in train

I observe that the report makes mention that all litigation (other than the John Heugh litigation) is at an end .

I then note that the report confirms that the Century litigation is in fact still in train and will be proceeding to arbitration in the near future.

Please advise why, the market was informed that all litigation (other than the John Heugh litigation) is at an end when clearly all litigation is not at an end.

Why did you sign an inaccurate annual report ?

Arbitration is still litigation Mr Chairman. it is costing the company legal fees and and we may win or lose and either be awarded damages or have costs awarded against the company.

Why was the market informed otherwise Mr Chairman. ? .

Standing for re-election at the Annual General meeting

I would be pleased if you would confirm that you, Mr Dunmore, and Mr Whittle will all be standing for re-election at the forthcoming annual general meeting this year in accordance with the companies constitution.

I am sure I don’t need to remind you that the rotation requirement applies to the three of you.

I know its remarkable that you should have to do that, and I can just hear all of you saying “we stood for re-election in June / July.

Sorry I don’t think that is correct, what the three of you actually did was defend a removal application from shareholders, a vastly different scenario.

And because the other three directors , Mr Cotttee, Mr Gasteen and Mr Herringston were in fact elected to office that enlivens the rotation requirements in regards to you and Mr Dunmore, and Mr Whittle.

This must be a record in corporate history where three directors have had to face 3 shareholder votes in a 12 month period.

And if we include the very distinct possibility of having a second strike against the company , we can make that 4 times in a 12 month period and all under your chairmanship.

Mr Chairman,

Shareholders are still not happy that you, Mr Dunmore, and Mr Whittle continue to be on the board.

You can expect a robust 2012 annual general meeting and the continued determination to see all three of you removed from office.

Sooner or later that will occur, whether it be resignation or by removal. I care not how,as long as it occurs.

I look forward to the market receiving a detailed response in the near future.

Camdenbob