astojic,As far as I am aware, two holes have been drilled...

astojic,

As far as I am aware, two holes have been drilled previously - both were dry holes. However this previous campaign failed to intersect the prospective sands. The Borsano permit is prospective for shallow gas plays and deeper oil plays. The prospectivity of the permit is heightened by its extremely close proximity to Villa Fortuna / Trecate which was discovered in 1984 with established reserves of 250 million barrels of oil. The well now contains 200 million barrels at the present day.

Key has defined a potential gas target called Borsano#1. Gas prices are fetching $12 AUD in Italy at the moment, which is among the strongest prices in the world. Villa Fortuna / Trecate also has established reserves of 175 BCF gas. The Borsano permit is 5 km northwest of the producing Brugherio gas field. I hesitate to guess the reserves of this field due to the fact that Key's independant geologist's report finds that additional information on the gas field in question is lacking. However it appears to be one of the largest gas discoveries in the Po Valley due to the size of the red blip attributed to it in Key's reports.

Although I eagerly antincipate a gaseous East African Christmas and an oily East African New Year, I am a shareholder of Key Petroleum in order to get exposure to the Borsano permit in the near-term. I am a shareholder now due to the fact that gas and/or oil discoveries for Key in Tanzania will make the SP run hard - therefore making exposure to Italy more expensive.

I expect that this permit will be farmed out. However this does not bother me. I expect the targets will be drilled in Q2 2008.

Cheers,
TheSoothgayer.