new ann - all good, page-19

In yesterday's announcement:

"It is still expected that the history matches and simulations will be completed for Elk's review by the end of February 2010. This will then enable funding for the first phase of development to be finalised."

This is not the first time they have said finalisation is pending the final results from Surtek. They have had over a year to negotiate funding so its likely that they do have funding (whether debt or JV) in place ready to be signed off once they know all the details for development.

The risk is that the terms may not be so good for ELK but I think with the op holding up well and yesterday's news of more oil to be recovered for less capex is likely to mitigate any risks.

With only a week left in February, it looks like they are on target for final results (otherwise they would have mentioned delays in yesterday's announcement). My guess is that we will get an announcement in first week of March detailing development and funding. Maybe a small run-up in sp next week in expectation.