material capital raising, page-20

It looks disappointing, but they need to drill a new well in Grieve asap to provide core samples. This will probably cost $1M. Also, maybe a new workover at Ash Creek and there's another $200K. So the $2M in cash they have (had) won't last long. The new debt facility is only $750K and I'd rather not start going too much into debt if we can avoid it.

Phase 2 of the chemical flood design was due to finish by end of March 2009 (announcement 26/2/09). The timing of the capital raising probably means that the design work has been finished on time and must be promising. I'm sure they will include details of this design work in the next announcement.

I still think there is a good chance for oil in the upper sands (most probably Frontier) and if this new well finds it, it will change everything.