over a whisky, page-2

G'day Whiskey,

This little guy is more complicated than I thought! Basis of entry was the Permian. The EFS is a bonus and a really good one. Other stuff is OK but stills needs capital.

IMO, there are 2 things GGP has actually run out of.

The first is capital - as noted earlier and I think you agree that its within 0 < Cash < $1M by end Q2 in the equilibrium state

The second is time - this is actually a function of capital.

The assets are tremendous - yes Acreage I know (and Keith writes about TSX listed juniors so GGP would not fit his filter) and receive my updates from DVN & APA an follow EOG, PXD and others so we have an excellent opportunity.

So what has happened? IMO we are a little overextended (like buying a new house before selling the first and coupling that to the new house is twice as big (more acres) and the missus has expensive taste (Hz wells) in furniture).

With over 2B shares outstanding, mgmt needs to get this funding - JV - right or there is big trouble ahead IMO.

Things change as is evident from GGP announcements of which an abridged summary on the Permian follows:

30/11/11:- SRH-C-6H : 1,800 bblo flowed (no period) ESP being installed

06/12/11:- SRH-C-6H: 80 boepd

09/12/11:- SRH-C-6H: flow tested 379bblo & 328Mcf over 24 hr period. Sales commence

14/12/11:- SRH-C-6H: shut in for permanent production installation

19/12/11:- SRH-A-8A: flowing at 28 bblo per hour (odd measurement IMO)

24/01/12:- SRH-1 (6H): goes into production – notes condensate rich gas @ $7Mcf

24/01/12:- SRH-2 (8A): flows 109 bopd

24/01/12:- SRH-3 (9M) & SRH-4 (9E): successfully completed

24/01/12:- SRH-5H: 1st horizontal in planning – 30 stage frac

06/02/12:- SRH-1: new down hole pump – issues with rich gas production

06/02/12:- SRH-2: 100 bopd

06/02/12:- talks of JV become highlighted (1st reported appearance I think)

23/02/12:- Pictures of donkeys etc.

23/02/12:- SRH-1 & SRH-2 : bottom hole pump issues

23/02/12:- SRH-3: on production (must mean testing IMO)

23/02/12:- SRH-4: noted as flowed on completion

23/02/12:- SRH-5H: location has been determined, survey completed

23/02/12:- Seismic study noted

23/02/12:- More annotation regarding JV partners and larger than thought

19/03/12:- SRH-1: now noted as a “Test Hole”, lower Wolfcamp (Cline) productive – own Horizontal well possibly (stacked play IMO)

19/03/12:- SRH-2: readied for completion of Frac Program (I thought it had been but not reported)

19/03/12:- SRH-3: on production 80 bopd

19/03/12:- SRH-4: testing of deep Strawn (single frac) followed by 8 stage Wolfcamp/Sprayberry after SRH-2 fraccing

19/03/12:- Suspending 10 well drilling program

19/03/12:- Still noting seismic discussion, JV partner and adding acreage


A Golden Opportunity GGP - don't blow it. Need to see proof now - doubt if I would add but the EFS annc this morning while a good one is not the main course.