investor presentation - ultra impressive

Hi All,

I have just been to the AUJ investor presentation in Melbourne. I would firstly like to say that I was VERY impressed with the presentation itself and the numbers which were mentioned.

I am writing an overview of the presentation so I apologise in advance if I double up on any of the information given in the asx announcement (slideshow of presentation).

To start with, the current financial standing of Augustus (AUJ) is extremely impressive. They currently have $8M in cash or cash equivalents. They clarified 'equivalents' by saying that these were funds that were attainable within a week or two. With only 40 million shares on issue, this means that the SP is supported by 20c cash per share.

The Mt Palmer project which AUJ hold a 100% stake is currently on care and maintenance and therefore the outgoings are minimal if any.

The bulk of the presentation on Silverwood was presented by Mario Traviati, an undisputed leader in his field. He has 30 years oil and gas experience including with huge companies in the past - Merryl Lynch just to name one. Mario is very excited about this project for many reasons. Some of which are the positioning of this particular project, Louisiana. Louisiana is a gas and oil hotspot, it is the United States largest oil producing state and I believe it is also the second or third largest producer of gas. There are continual finds throughout the state and this lends itself to being a strong driling ground for these resources. He also likes the fact that being in the United States, as opposed to many other countries in the world, if you make the discovery, its yours - no given off percentages to the Government like many other places around the world. Another reason is Oil and Gas plays are the place to be at the moment, both commodities prices are on the rise with many predicting oil prices to rise as high as $140 - $150 per barrel in the next couple of years. Gas prices are also predicted to make a similar jump percentage wise over the same time frame. This is considered very much to be a low risk play, as I will go into later, there is the chance for in excess of $100M revenue to be gained from the two prospective wells for an outlay of only around $1M !!! Not only that, but all involved are quite confident that this is a great chance of success.

The prospect lies beneath a producing well, North Edna Field, which was first discovered in 1954. This has produced approx 7 MILLION barrels of oil! A massive bonus to this being the case (apart from the obvious in that the proximity of this project is so close to a producing well) is that if/when AUJ succeed in the drill, infrastructure is already in place which will bring down production costs quite substantially.

The first shallow well, Vicksburg, is a very simple drill. IT is only a 9300ft drill and should be drilled in less than two weeks. Below that, the secondary target is Cockfield. This is a 11600ft drill and a decision will be made on this after Vicksburg is drilled. Between the two, the is the potential of 7.4 million barrels of oil.

If you extrapolate that out to a $$ value, given that AUJ holds 40% of Silverwood between the two projects, there is the potential of at least $1.65 per share (current price $0.43c, hence this could be close to a four bagger).

NOW, my reasons for believing this is a HUGE chance of success....

This was drilled back in 1982, there was gas and oil everywhere, it ended up being a blow out. There was so much oil and gas that the rig needed to be evacuated and when they returned the following morning, there was oil all over the place. The well blew out again in 2008, same story, they weren't prepared for the high pressure and suffered the consequences.

The boys in charge of this one now are doing it the right way. No cheap operator, only the best - you have to spend money to make money, the last two attempts show what happens when you do something on the cheap. The project has everything in place, the operator is about to be chosen in the next week or so, there is minimal sitework as it is flat land, there is heaps of infratructure present and as I said, they are prepared to handle a high pressure well. When you are only 100 or so metres from 2 bowouts, you know the area is loaded. IF you do it right, imo, its very hard to get a bad result. Drilling is set to begin in June, not long to go....

I left the presentation tonight very bulish on this one both in the short and long term. I think there will be many investors taking an interest in this both from Australia and overseas. With the current SP at $0.435 and the options great value at only $0.17c, I can see good money to be made on this one. I was pretty much fully loaded, but after this, I may have to reassess and buy a little more!

Bet of luck to all,

T-JAM