kenny, page-3

I did long read but if you want it look below:

I'm hoping to get a debriefing from our petroleum engineer late tomorrow (Tuesday here). Our managing director and the chief geologist, engineer will be in Park City from Wed through Friday. Their sole focus is to move the operators field resources toward an almost exclusively post drilling focus. We are now actively a part of the well bore formation zone selecting process as well. My best guess for flow news is maybe Thursday Australian time.

Since the operator has spent the last 3 years totally focused on drilling (remember, no gas plant) they just need a bit of a push to adjust and properly staff the post drilling stimulation and connection process.

Cheers,
Kenny Hill
Chief Information Officer
Austin Exploration Limited
www.austinexploration.com



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From: Bradley Tabone [mailto:[email protected]]
Sent: Mon 6/23/2008 6:53 PM
To: Kenny Hill
Subject: RE: Stimulation


That makes perfect sense. I realised that the well had a 33 foot formation and guessed that maybe when they were sectioning it they may have blocked the naturally producing part of the formation. Can I ask why RET did not look into the formation closer before choosing which section they were going to acidize, is there currently methods to see which would be the most benficial?

Its nice to have someone back on board that can actually explain things to the normal investor, yes you are correct a petroleum engineer does have trouble but to no fault of their own.

Can you please give some kind of indication of how long till we are expecting stimulation results either from the wilkerson well or any others that will be connected?

Regards,
Bradley Tabone
Navigator Software Support
Ph 1800 338 151


>>> "Kenny Hill" 24/06/2008 9:46:07 am >>>

Bradley,
I've read the recent releases myself and was also a bit confused. Communicating clearly to us regular folks is not a strength of a typical petroleum engineer. Our PR firm really only acts as a media distribution service for the releases that I write. My apologies for the confusion while I was away. Here is what I know so far.
the Wilkerson well had 33 feet of Fort Payne formation at the bottom of the well bore.
a typical well in this field has a thickness of around 5 feet for the this same formation
acid treating the entire 33 feet was not possible so the operator put a bottom plat and top plate on about 1/3rd of the bottom 33 foot section of the well bore. Basically sectioned it and separated it from the top 2/3rds of the formation by sealing it.
The next acid treatment will be done on a different depth of the Fort Payne. The New Albany shale will also be fractured.
The only explanation I have for the flow rate decline is that the section of the well bore that was naturally producing must have been cut off when RET did the initial acid treatment. They will clean the well bore out prior to doing the next treatment and frac job so I would expect the naturally flow rate to return.

Cheers,
Kenny Hill
Chief Information Officer
Austin Exploration Limited
www.austinexploration.com



--------------------------------------------------------------------------------
From: Bradley Tabone [mailto:[email protected]]
Sent: Mon 6/23/2008 6:05 PM
To: Kenny Hill
Subject: Stimulation


Hi Kenny,

I am just trying to piece together the last announcement oh I wish you were here when it was written.

"Consistent with the Company's anticipated timetable announced on 25 March 2008, the
acidization process for the Aus-Tex PC1 (Arthur Wilkerson 2A) well commenced on 26 May 2008.
At this stage, the only portion of the pay zone anticipated to produce, has been acidized.
Production from the Fort Payne zone has produced 10 MCF of gas. The Company plans to acidize
the balance of the Fort Payne zone using a different contractor and acid formula."

With acid stimulation how can a well go from 200MCF of gas naturally to 10MCF after acidization. I may be reading this incorrectly if I am I will be happy to stand quiet. You stated in a previous email that the well had been tested before you went away by AKK and it was producing within the expected results its all science... this is obviously not the case how can there be such a difference?

Also when are we looking to expect some actual good stimulation results I guess I am a little concerned because we are not trading 15% under the SPP price and I believe if managed slightly better we wouldn't be in this situation. I realise you are at mercy of RET but I think managements influence comes into this equation and can have an affect.


Regards,
Bradley Tabone
Navigator Software Support
Ph 1800 338 151