Huiga1B, page-4

re: Huinga1B Deal looks good but Cheal prospects are very small and I suspect BLO motivation was largely to offload any commitments it had in the lease to conserve funds. On Huinga, I understand the JV is looking at drillling a small (60 metre) sidetrack into the Murihiku thrust from current well bore. They can do this with a small work over rig or what is called a tube coring machine (think I have got that right). When they cemented the casing thru the Murihiku the cement, like the drilling mud before it, apparently drifted back into the fracture a metre or more. So when it came to perforating the well they not only had to shoot through the steel casing but also the cement. As the perforation distance is not more than a foot or two no way they could get through the cement which had effectively sealed off the thrust. So now the idea is to drill into the thrust behind the cement presumably starting from a point higher up the well from the current perforations. I understand the JV partners will meet at the end of this month to confirm future drilling activity. So not all over yet at Huinga. Looks like they should have done an open hole DST once they hit the Murihiku rather than drilling on to the Kapuni. What a wonderful thing hindsight is! JBC