recent patto report, page-8

A few interesting points from the latest Patto report (thanks 3JD3)

Assuming there are no further problems with hydrates, the IRR is still due late October. The infill drilling will merely convert some of the IRRs Probable into Proven. ie the total 2P will remain the same. I assume the ASD wells will still take the 6 weeks to be stable producers as per the last update. RR 8-19 I presume will be even longer.

My take on the above is that they only need the 5 RR wells to be stable producers to complete the IRR. Why do they want the IRR out before completion of all the wells? I can only presume so GS can get on with their job of selling the assets (company)

The Pattersons report mentions selling the assets many times - it certainly is no secret agenda. The $1.52 valuation would seem very conservative, it works out to $A1.75m per bcf (fully diluted) based on last years IRR reserves.

Interesting that the areas covered by the Oman wells will be included as Probable, until converted to Proven by current drilling. Does this mean all the area between the RR & ASD wells will also be included as Probable? Remember the 1st of the ASD wells only reached TD on 2/7/07, 7 days after the 1st IRR was released, so I presume was not included in this IRR.

The report also goes into quite a bit of detail explaining the treatment & prevention of Hydrates. It certainly gives the impression that there will be no problem controlling the hydrates, its just a matter of how long it takes. They also don't think further prevention treatment would be required once the wells are established with stable production. I get the impression they are starting to be conservative with their reporting, maybe due to past hard learned lessons!