meeting update

Hi all

Good positive meeting today.

Nanne not present surprise surprise. Warren is over east so James was there but Matt did all the talking and answering of questions.
Only a handful of investors there but was nice to meet a couple. Seems everyone reads HC but don't like to post much.
Tretch and I seemed the only ones wanting to ask any questions so didn't get all the answers because it was starting to look like an inquisition lol

That said Matt was very knowledgeable and answered and spoke with candor.

So please forgive if I paraphrase and not direct quote as there was a bit talked about and I didn't take shorthand.

Firstly this contract or more accurately, letter of intent.

Matt was quite apologetic at the time taken to get to this point. He stated that they were surprised how long an agreement in principle took to get to contract stage as each side looks to divest risk to the other as much as possible. Just what happens with commercial negotiations and Matt is a tough negotiator. He was very excited that we are involved with AWT who in his words are the number one player in the oil and gas drilling in W.A. If it gets drilled in WA it gets drilled through AWT. It is seen as a small stepping stone in a long working relationship with AWT.
Matt was genuinely thrilled with this tie up. He believes once the drill is proven then work in abundance will be forthcoming through AWT alone.
I enquired about the vision for the company ie are we a driller or did they still highly value the CLRS. The indication was that they believe the clrs will be commercial with perhaps something announced in a few weeks re a new trial as they believe all the bugs have been ironed out. The AWT drilling will most likely be in November. He said that having someone like AWT to hold our hand and teach us what is required for oil and gas/geothermal drilling was a tremendous benefit not to be undervalued. (words to that effect anyway) I asked then why are we advertising for drillers and an Operations mng now if we don't have any work until Nov?
Matt mentioned that we have several other 'bids' in and was probably being a bit coy. Reading between the lines we will be doing some water drilling very soon with probably a contact announcement with in a few weeks. His words were that whilst it didn't utilise the GT3000 to its maximum as a deep drill rig the opportunity for significant profit was available. Several other contracts are possible. It would seem that we have put numbers on paper for a number of opportunities and wait to hear back whether accepted or not. Enquired about additional rigs and Matt seemed to indicate that this was dependent on 2nd tranche being taken up. He said 4 to 6 rigs per year were easily achievable and the premises could accomodate this. We have a bit of work to do and money to spend to make this rig drill ready so not sure how much funds will be left over. I get the feeling that we won't see another rig until maybe this time next year which I am happy with. Would rather be re investing income than cap raising and diluting. He believes that we have a 2 to 3 year window of opportunity over the competitors even if the attempt to break patent.
The short answer why pull out of Merriden is as most suspected. Run out of money. I was interested in Geothermal opportunities in places like Chile and whether we had made any approaches. As far as Chile goes the answer was a bit vague but indicated the rig was ideal. So I take that as a no...we haven't done any real work in that area yet. He did however mention that they have been in discussions with various parties in the Phillipines re geothermal opportunities.
They are currently head hunting for a new CEO but Matt isn't keen to pay too high a price which is a bit of a stumbling block atm as they along with everyone in the drilling game demand and are paid very high salaries/wages.

One other comment Matt made was that if we are 15c in a years time none of them have done their job.

Now that I agree with :)

probably some more that maybe Tretch can recall and the above was done with a mix of questions from the floor and also 'chat' after the meeting.

So in summary

we have taken out first baby step towards commercialization. It is now up to the rig and just maybe the CLRS to prove up what can be achieved.