"It is with great pleasure that we present this, our third and...

"It is with great pleasure that we present this, our third and most significant newsletter. With the current market conditions and the company making relatively few announcements about new wells being drilled it can lead shareholders to believe that things are not going well. The reality could not be further from the truth. Our project is becoming recognized as one of the hottest plays in North America. Equally important is that and our strategy of keeping most discovered formations behind pipe i.e. not bringing them into production immediately but waiting until development of the optimum completion techniques is already proving to be the correct strategy. Optimum completion techniques are the fracture stimulation techniques that allow the shales to release the gas.

Over the past 12 months when gas prices were high this strategy has not been well understood however the company has always been confident that the project would attract the experienced operators such as those now joining the project area. The developments taking place at present will see the true value of the company’s assets evident to all very shortly. The success of Newfield Exploration is completing more than 100 wells in the Woodford Shale just 30 kilometres to our south confirms that this completion technique has now been established. The Caney Shale is also the focus of great attention. In one of the wells Tomahawk was involved in we understand that the operator has spent more than $US1 million on various scientific analyses. With this attention we expect the optimum completion technique for the Caney Shale also will be determined very shortly.

The significance of this is not just the revenue that the wells deliver but the fact that reserves can then be booked to the leases which intern leads to a massive shift in value of the leases and hence a re-rating in the value of Tomahawk. The strategy of patience during this time is about to pay dividends. There is little doubt that the US market sees the prospectivity and value of our assets as being much higher than does the Australian market and your board is working on ways to fix that.

Notwithstanding the late Professor Dickey’s philosophy (panel top right) being almost 50 years old, it is the driving force for Tomahawk and others to tap into the massive resources offered by the Woodford and Caney shales in Oklahoma. As the industry gains more knowledge with drilling and completing the Caney and Woodford Shales, the play will prove to be one of the major gas producers for the United States. The extent of the play requires considerable capital investment, but the economics can not to be denied. This play, along with other non-conventional plays in the United States, has become the new gold rush of the 21st century oil and gas industry. Soon, these non-conventional shale plays will in fact become conventional."


So ... hopefully soon some news regarding a major revaluation?