Immediate Thoughts:

Reading the Quarterly Activities Report and bundling everything together – I conclude that the JV Mahalo Gas Project is reaching the point that a decision will be taken as how to progress this to production – with COI wanting to lump together Mahalo North/Mahalo East at the same time to benefit from future economies of scale.

Five likely conclusions that I can envisage:

* Capital raise to fund our share of the JV Mahalo Gas Project as a stand alone opportunity. With our Market Cap standing at $71.6M I think this is unlikely.

* Sell our 40% share of the JV Mahalo Gas Project to a third party (likely Santos) which will release the capital to help us to unlock value in our 100% owned blocks Mahalo North/Mahalo East blocks.

*Release our 40% share of the JV Mahalo Gas Project in exchange for a percentage share of future production – leaving COI with no immediate funding difficulties associated with bringing the JV to production.

* A combination of the above.

* Exchange our interests in all the Mahalo Hub blocks for an agreed percentage of future production. Whilst we are sitting on huge potential – we are at the point where the cash required to bring that potential to production is substantial and the depth of our pockets does not stretch to the amount that is required to fund our share.

It’s all a game of ‘cat and mouse’ – the JV Partners need us to agree otherwise they can’t move and capitalise upon their investments – we need a deal to which they agree otherwise we remain in the doldrums.

Like many others – I’ve been here and holding shares for what seems like an eternity – we must be close to reaching a negotiated conclusion.

Just my thoughts…