The report is everything. If the Reserve report is significantly...

The report is everything. If the Reserve report is significantly bigger, and note I said 'If', not 'will be', because we do not know at this stage. Then shareholders, will not sell off cheaply unless they are forced in this matter.

Facts:

* The upgraded Reserve Report will help determine the value of the Company and is an essential part of the recently announced (February 16, 2009) process of a possible sale of the Company and/or its assets (refer below).

* Since the Announcement the Company has already received inquiries of a preliminary nature from a number of industry parties.

* The drilling operations undertaken since June 2007 have been significant and the impact of these is not reflected in the June 2007 Report which certified 2P Reserves at 319 Billion cubic feet (Bcf) of gas.

* At this time it is expected the Reserve Report will be finalised and the results advised to the ASX in March, 2009.


Possible Sale of Company and/or its Assets

On February 16, 2009 the Company advised the ASX that it had mandated Goldman Sachs & Co to commence a process that may possibly result in a sale of the Company and/or its assets. Since the Announcement the Company has already received inquiries of a preliminary nature from a number of industry parties. Once the updated Reserve Report (refer above) is available, Goldman Sachs will commence the formal process relating to this matter.

Management have the cards, they have to show their hand eventually. If you're a holder you have to take heart from this annoucement, not that long ago.


On the 3rd of November, Devon Energy announced it had completed a transaction with Chevron to acquire a 44% interest in its Drunkards Wash fields in central Utah. Devon paid effectively $US770m for 220bcf of 1P reserves which equates to $3.67/bcf. This deal was the most comparable transaction we have seen yet due to its close proximity, resource play focus and similar reserves position. It highlighted that there is still a strong market for M&A deals in the US and in particular for resource gas plays. The price paid was significant and suggests considerable upside for MAE. MAE have indicated that they hope to book 500bcf of 2P reserves at Clear Creek. Assuming that they manage to book 50% of this at the 1P level, then the deal could potentially achieve a greater price.