I think Kenny's reply goes a long way towards alleviating...

I think Kenny's reply goes a long way towards alleviating concerns re current climate and the way ahead.
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Greetings Kenny,

In the past few months several major ann re AKK have helped consolidate the share price to a recent intraday high of 10.5c.
Since then the sp has had a retracement of 47%.

It appears in recent times a strategy of continuous sell downs using Bot Trading and conventional selling has downgraded the sp to close today at 5.5c.

This was disturbing today as the sell down happened on the sixth highest volume turnover day for the past 12 months (1,380,000 Volume)

With all the focus on PC very little has been announced on PEL 105. When is it likely that the market will receive an update on this project ?

Whilst we acknowledge that the current concerns re Bot Selling and the Sell down of the sp is beyond your control, could you alleviate investor concerns by providing some further opinion regarding this matter ?



Kind Regards


XXXXXX


From: Kenny Hill
Sent: Wednesday, August 26, 2009 8:42 AM
To: 'XXXXXX'
Subject: RE: Current Market climate



XXXXXX,

Thank you for your email and questions. I also appreciate your request for permission to post my answer on Hotcopper. Very refreshing….

On a typical day I’ll answer 20 or so of these same emails from all over the world and they usually all carry a similar topic or thread. As with all of my responses they are usually just basic observations and directional in content so feel free to post this any place you wish, however I do have one request.



Unfortunately many people use my email replies for their own purposes. These email replies have a tendency to be chopped up, taken out of context to support someone’s position on our shares and then sent around the internet and / or posted on various trader boards such as Hotcopper. Since you asked for permission I’d like to ask that you keep this reply in its full form. Now on to the answers…..



Your questions cover several topics that have been very popular elements of the last few days of incoming investor emails. The common themes are trading volume, who is the seller, what would motivate someone to sell on good news, when are we going to hire a new managing director, when are we going to start talking about PEL105, who’s running the company, capital raising etc., etc. etc. Here are my observations regarding most of these topics and I’ll stress again that these are just my observations.



What’s happening at the company? - Since June 24th this company has settled a lawsuit, reorganized the board, removed a managing director, implemented a stringent new set of business process and oversight practices, raised over AU$500,00 in new capital, drilled three successful wells at Park City with a fourth underway and we now have our relationship with Adelaide Energy (PEL105) and PIRSA back on track. We have accomplished all of this in just over 8 weeks of time and we have done it because each member of the board and management team are working together in a very coordinated effort and with one plan. Although we have been getting much accomplished we also realize that we must begin laying the ground work to reposition this company and grow it beyond our current holdings. A sub committee of the board led by me and one other board member is now jointly handling most major focus items for the company. After some continued success we will handle the open position of Managing Director.



What’s going on with the shares? - As with all things CHANGE is embraced by some and scares the hell out of others. I can’t directly tell you what motivates someone to sell shares on good news but I can give you some background. As I’ve said in other emails, many of the companies largest shareholders are investors that were part of the original IPO and who followed David Schuette into the stock because of his ability to sell the PEL73 prospect and a few other large high risk exploration plays here in the U.S.. The track record of those prospects speak for themselves. With his recent departure and our current focus on PEL105 and Park City, these investors are probably a little uncertain and many of them are selling shares. Some of the original company directors that are no longer affiliated with the company are also selling shares. Many of these people own shares at less than a nickel. The current share rollover will play itself out and the company will move past it. Remember, it’s only been 4 weeks since our former managing directors departure.



What about PEL105? – Adelaide Energy and Austin are now working directly together for the first time in quite a while. The relationship is stronger than ever and we hope to be able to give the market an updated work plan soon. Adelaide Energy is very well capitalized with approximately $5.4m of cash on hand and through their outstanding seismic work a very promising oil well has been identified. ADE will fracture the tight sands to access un-risked P10 OOIP of 23 MMbbl and P50 OOIP 2 MMbbl. After the drilling is complete Austin will have a 50% interest in this well. The web sites of both companies have plenty of information on the well prospect.



Do you guys have a plan? - Here is the short term plan summary that we are currently executing. It was published on our web site August 1st.

Short Term (through November)

Focus on projects capable of producing positive cash flow in less than 90 days
That means the Park City oil and gas well completion program
Complete at least four wells with a focus on oil production
Target first oil delivery to sales for the month of August, thus delivering first income in September
Apply what we learn from the first four wells toward the selection and prioritization of additional offset well sites on currently held acreage
Operating expenses must support cash on hand and cash flow from production forecasts
Focus on firm opportunities that are justified by sound economics
FOCUS, FOCUS, FOCUS on the details
Additional capital raising as needed
Near Term (through April 2010)

Get the PEL 105 drilling schedule back on plan and drill the well (Adelaide Energy to develop the schedule)
Raise additional capital as needed
Leverage the multi-well offset drilling opportunities provided by held acreage at Park City
In conclusion, we will grow the share price by proving to the market that we can produce a solid income stream, we have good fundamentals, we have good leadership, we have a strong strategic plan and most importantly we get things done. All of that starts with a focus on the basics and insuring that we leverage what is currently on our plate.



All the best,

Kenny Hill

Vice President of Business Operations and Investor Relations

Austin Exploration Limited

Aus-Tex Exploration, Inc

AEL Management Services, Inc.



Office - 512-275-7802

Cell - 512-423-2547

Fax - 866-234-9806