LSE tonight, page-1531

I queried DW on the $35 figure some time back and he said that no official figure had been released and obviously would not discuss as it is quite sensitive. Mid $40's has been put into some of the presentations and I think this will be the benchmark for most investors. Even at mid $40's say $45/bbl the project would currently be sitting above break even.

My thoughts are that when an official estimate number is announced that is will be sub $40/bbl meaning that we are in profit territory of $5-10/bbl at today's oil prices. As MM alluded to there are plenty of supporting factors that could push the oil price higher over the medium to longer term which could increase our margins. For now $10/bbl profit seems increasingly likely.

Not sure if many here follow the neighbors but Otto are looking very cheap in comparison with a 10% interest in the Great Bear acreage. Apparently cash backed to around 35mil with a ~50M MC so exploration assets only valued at 15mil? It appears from recent presentations that they have shifted focus to Alaska and rightly so, conventional targets have been hit and plenty more in the pipeline with a multi well drilling program coming up on the slope. Interesting that 88E are yet to announce too much regarding conventional. My gut feel is that this will be the icing on the cake and perhaps the first to be farmed out to fund the unconventional development?

My thoughts are that GB are sitting on a truck load of conventional which is a great thing, huge synergies available should both companies successfully flow test respective production wells. Development costs will be reduced in line with the scale of development across the North Slope. The better they (GB) do the better 88 will do in the long run.

Very exciting year ahead.