Ferreting in Louisiana

Terrific site visit and hour meeting with senior management, including our new MD, who is quietly spoken and very focused on getting those BTAs executed as he familiarises himself with the business. The good news is you'll get to meet him as shareholder information sessions are being planned a few months hence. I think he is an excellent fit and seems very approachable.

My overall impression remains we are in very good hands. Their experience (together with those who drove me to LC, showed me the local office and site visit) is over 100 years and that experience (nevermind the quality of the Board and other Execs) is invaluable in these tough times.

Anyway back to the specifics which left me warm and fuzzy and wanting to buy more at these crazy levels.

Going into last month's LNG16 Perth conference (11-15/4), negative sentiment across the sector was compounded by FERC's rejection of Jordan Cove a few weeks prior (12/3). During the conference, LNG had 4 days of meetings hoping FERC's Authorization would be released the week prior. As it turned out, it was Friday evening US time when FERC's Authorization came through. The subsequent ASX release 18/5 made clear MLNG is no JC.

So now MLNG has FERC's Authorization, we are 5 weeks into the 90 day statutory period before NTP with non-FTA approval expected shortly thereafter. This is making everyone sit up and take notice as gating items are diminishing rapidly. FID & FC are the key (internal) milestones thereafter and there are no concerns with BNP or Stonepeak.

The other key point is MLNG is the only greenfield development with a fixed priced EPC confirmed until YE with KBR providing huge credibility for LNG's OSMR technology. Since signing, there have been no further questions on OSMR whereas previously a Q&A had been prepared to address just such concerns.

Furthermore, there are a number of projects simply won't get up, aren't as advanced or have been cancelled, including:

> Jordan Cove - local community not supportive, FERC rejected. Appeal pending;
> Woodfibre, ~$1,000 per btu still double MLNG powered by OSMR;
> Tellurian, Souki's latest project (24mtpa) recent pre-filed, but will take 2 yrs, not sooner as he's indicated;
> Venture Global LNG recently raised $250m, but run by inv. bankers from DC, no experience;
> Oregon LNG ceased operations (14/5). Website taken down in past day or so; and
> Downeast LNG - just Ann. for sale (19/5)

So when you look at where MLNG is right now, it's gas supply from 2020 will be smack in line with demand curve expectations, it's got EPC certainty to YE (helping underpin the BTA commercials) and as sentiment improves, those serious parties need to either put up or shut up.

In short, this Mexican standoff can't remain for much longer and when one moves, things could happen quite quickly. Also much of the prep work on the financing is done and the 'go slow' on procurement could quickly be activated with contracts already in place.

So to recap, compelling rationale for BTAs to be signed, include:

> FERC Authorization (contrasting JC rejection);
> EPC (KBR fixed price contract to YE);
> FERC NTP (within ~60 days); and
> Non-FTA (immediately post NTP)

Site Visit

The site visit was a 2 1/2 hr drive from Houston on an excellent 3 lane highway. And you know you're amongst oilers, with the skyline peppered with established facilities and new ones going up. Whilst they've seen past cycles, they're a tough group with a can do mentality. There is absolutely no doubt, MLNG has local support and the LC office will quickly fill when the team gets mobilized.

2 things struck me: the FERC meeting originally scheduled for 4 days was trimmed to one and concluded very, very quickly with no objections (contrast that with JC). The other was a picture I saw hanging on the wall in the LC office with a grinning JB walking through the vegetation on site back in 2014 after MB secured the site.

According to the guys who showed me around (and they are 2 of the best in the business with years of experience and local knowledge, in short know their stuff), they couldn't believe how good the MLNG site is. Repeat, it is a tailored made. Period.

Now whilst I'm no geo or engineer, it is patently clear to even a ferret that the site is a superb location within the Port of Lake Charles property. The canal, facility and site elevation visible to the naked eye not only provides protection from storm surges (1 meter has happened), but importantly negates the need to move millions of tonnes of soil (and of the right consistency) on which to build saving many $Ms. And to hear again the story of how MB nicked this from under BG's nose, is LNG folklore!

The KM pipeline is clearly visible running through the property and then runs underground across the channel as part of the previous import facility. There's an electricity sub station barely 2 miles away. Infrastructure is well developed and best of all, materials and fabricated storage tanks etc, will all be barged in and unloaded onto site. How good is that??!!

It's also an incredible compact site, barely 115 acres which is dwarfed by other compatible facilities but which cost vastly greater again underlining OSMR setting a new benchmark in LNG development in NA. Hopefully from the photos you can see the elevation (photo 4) I'm referring to.

So after what was an exhausting but thoroughly enjoyable and insightful day, I came away as excited as I have ever been since being a part of this unfolding story.

And as I said earlier, it is crazy to think the share price is where it is. And I cannot fathom it will remain at these levels for much longer.

Now whilst I have no crystal ball and have been wrong before, having seen with my own eyes and heard with my own ears the views of those with vaste experience to the many questions I posed, I'm left with an overwhelming conclusion that LNG is fundamentally undervalued.

And that presents a wonderful opportunity for those who can see through the short term noise and see the LT potential.

So I'll conclude by sharing what for me was the quote of the day "we are on a good journey with great things to come ... "

Go LNG!

Timbo