Malcy's Update, page-9

Whisky

Agree broadly with what you suggest is the way forward and what we can expect from FAR's unofficial DoC in Q3. I think what is planned is stated by Cairn and FAR as follows:

Cairn: "The SNE-4 well is the Joint Venture’s (JV) sixth well offshore Senegal and the fourth completed this year as part of a multi-well evaluation programme to help delineate the shape of the structure and establish deliverability and full potential of the field. The Ocean Rig Athena will now be de-mobilised and the JV will continue integrating the significant amount of data collected from the four wells, including two drill stem tests and more than 600m of core. This will enable the JV to determine the most effective way to further the appraisal of this significant oil accumulation and evaluate development options.

FAR: "The Joint Venture is using the extensive data set acquired from the SNE appraisal wells to evaluate development options and determine the best approach for future appraisal drilling."

So your scenario fits these statements. They will be focussing future appraisals on finalising a development plan.

The only thing that remains unclear to me is that FAR stated on 13 May at the AGM:

• Decision on future appraisal by end May

So I'm wondering whether after results of SNE-4 on 19 May this can still be achieved? Maybe FAR just meant the JV will decide after the results of SNE-4 whether further appraisal will be done (i.e. if it had been a duster they would have reconsidered as they have enough data on the central thicker sands) ... and the answer is yes? The timing is the only question and FAR says H2 .... which is a pretty loose timeframe.

Its all looking very good IMHO. We just need a higher oil price environment to make investment in FAR look more attractive and give us the reward (we deserve?) for our patience.

H