JBP,You forgot to mention that the gas produced is contracted...

JBP,

You forgot to mention that the gas produced is contracted for at relatively fixed prices on long term contracts. So effectively, the drop in oil price does not have an impact on gas revenues (only on the condensate produced with wet gas).

In the COO presentation at the AGM, it was also pointed out that "reserves value previously ~60:40 weighted towards oil, now about 50:50"; so that gives you some idea of how much the drop in oil prices is hurting us value wise.

In addition, the CFO made the following comment "60% of our oil sales continued to be hedged at minimum prices of US$60 and US$80, going forward". A little bit higher than your source.

Finally, the COO pointed out that for PEL92 (which includes the Parsons Oil Field, amongst others) "oil exploration in the block is economic down to a US$ price of about $35/bbl and production of existing reserves economic to below $20/bbl". So, for this field, we still have some headroom before they have to shut in the fields if and when they become loss makers.

The proof, as always, will be in the cash flow for the 6 months ending 31 December 2008 to see what impact hedging has had on the results, but we will have to wait till end of February 2009 for it.

Cheers