production still declining, page-4

The announcement states that production has averaged around 13,000 bbls per day for the last month yet two weeks ago OEL stated that production was at 14,000 bbls per day. Therefore one has to ask whether the actual production rate now dropped down to around 12,000 bbls per day.

I have no idea what affect the current well testing programme is having on the daily production rates but past announcements have stated that 15,000 bbls per day was easily being achieved and that those rates were being acheived despite the initial commissioning and well testing. It may be that that production could be increased but from my reading of the announcements it appears that a rate of about 12,000 bbls per day is what we are going to get.

With production costs at US$15 a barrel for the current production rates we still have a substantial margin should the production rate fall further. Most importantly though, we currently have income and profit so be thankful as many companies do not have that luxury.