entitlement issue, page-20

If you wish to gauge how this could play out i suggest you look at the beach adelaide energy cooper basin deal. ADE owned 100% of the tenement realised the potential but to get the money for the drills farmed out 90% to beach to prove up the shale gas.

They did two wells encounter and holdfast and tested just as NWE will test, expected low flows but received better than expected flows especially from the tight sands, potentially more gas there then expected. NWE have all the same ticks that bpt/ade had from the results of their initial drill tests and in some instances have greater shale depths. So NWE original estimates could turn out to be better.

I expect the fracking will draw similiar results to the cooper.

Beach held all the aces as the operator took a 20% interest in ade knowing exactly what they had and eventually took ade out in an on market takeover. Ade did not have a strong cash flow either but was still able to get 20 cents a share for 10% of pel 218 and 20% of 855 in QLD.

There was more pontential for ade sh but as a small explorer you are always disadvantaged in terms of cash and therefore vunerable to the bigger players. But in the end shareholders still made money on their investment and I expect NWE shareholders will do the same.

This is a game of patience to reap the rewards.

The next tick is the environment minister.