euroz update 23 oct

Key Points

· RFE’s well portfolio is accreting - There are now 7 wells drilled that are approaching various stages of testing and/or production.

Four additional wells are awaiting drilling – expected imminently, and

Three/four wells are continuing to produce.

· The 3rd drill rig has commenced field operation, with the fourth sh’d to come online in Q1 CY’13. With 4 rigs in the field, operational (and assoc production) ramp is expected to be significant over the coming months.

Individual well results will becoming increasingly secondary to the total monthly production achieved.

· Tasman #1-15H is continuing to flow back load water (clean-up) as expected. The well has produced on ave 181boepd over the last 7 days, the rates are continuing to improve as water is recovered.

The well has not communicated with faults and all appears very positive at this stage.

Investment Thesis

With A$70m and a growing oil rich production base, RFE will be advantageously positioned to leverage the potential of its acreage and the strategic development planning undertaken by Management.

They retain their Buy with a valuation and price target of $1.51/sh that reflects development drilling purely to hold acres by production.