harrison 1, page-7

Sushi 1,thankyou for your continued interest in antares energy.I am going to attempt to answer your concerns to the best of my ability.1)According to a conference that antares was present at in LOndon on 23/2/07 the Oklaholma assets are antipated to be wound up by end of June 07 for a consideration of between us$5-10m.Time will tell if this proves to be the case.2)Now if those assets were sold today they would indeed have no production cashflow.If they were sold the company would have the sale proceeds to use.3)Due to the company changing its accounting period from a financial year to a calander year i am not sure when they are required to report their financial position next,but i would envisage it will be shortly.So from the information that i have available,as at 31/12/06 they had a$18.298m in cash of which $10m would be proceeds from 5m convertable notes issued.Thier estimated cash outflow for the march quarter is a$6.031m.this would leave them with just over a$12m in cash.During the march quarter they issued just over 3m convertable notes for a touch over a$6m in cash.So i am of the opinion that they will have approx A$18m in the tin at the end of march.Now as far as the june quarter goes if they sell those oklaholma assets they will receive the cash from that. According to the oil barrel report first production is expected from oyster creek in the june quarter.The company also has the capacity to issue another 22m convertable notes for A$44m in cash.This is assuming investors are willing to participate.4)Now from my own calculations i expect antares share of production cash flow from harrison 1 to be in the order of A$5-8m.This is only from the gas and condensate figures we have been given so far.This should be enough to cover interest payments on convertable notes as production ramps up.The upside to this includes scott2 and possibly other development wells.Production cash flows from the 2 current wells may be 10 - 15m$A.5)How do they support the market cap? Well there is no proven traditional method to value this company.You are probably right to believe there is a fair bit of blue sky in this company right at the moment.A lot of the share price is in garcitas ranch.At the london conference it is believed that a 10 well programme is planned for the field.Basically many people believe there could be up to 3 times more gas in the field than the pre drill estimate of 45 - 75 bcf of gas.Of course this is not proven yet,people are encouraged by the apparent large good quality gas sands encountered whilst drilling.New taiton has had encouraging gas shows whilst drilling.kennedy ranch kmf-228 had good gas shows in shallower zones(i believe may hold 30bcf gas) lamay and antares are sorting out equity levels before moving forward.All in all the market perceives them as having had a reasonable amount of success to date and are pricing them accordingly.When antares farmed into oyster creek it was never intended to be a company making field it is simply for cash flow to fund other parts of the business.6)finally there are many people that i enjoy associating with,although a fair proportion i would never do business with.You are obviously a conservative thinker so you will associate with companys that suit your valuations and risk profile.I hope this clarifies some of you concerns.All the best with your investing.