options, page-13

The key to the option play is the Momoho drilling which is planned to commence in May.

This is a similiar play to the Kupe gas/condensate project costing around $US800 million which is currently under development with first sales expected in mid 2009.

As with Tui the Kupe project was committed when energy prices were much lower so there are excellent super profits in this project. With around 10 million bboe for NZO this could be $US40/barrel or extra revenue of $US400 million.

Momoho is about 5km from Kupe and the primary target is the same Farewell sandstone. If moderate gas/condensate reserves are found say around 50% of Kupe this could add 5 million barrels to NZO inventory to a project with costly infrastructure in place. Additional revenue [at current prices] at around $US400 million which is worth around $US200 million today. Should add about $US100 million to the value of NZO or about 20 - 30 cents a share.

So the options are a leveraged play on the Momoho drilling.