response from brett mitchell

OK patient holders (and those not so) I emailed Brett Mitchell earlier this week and below is his response in brackets...

1. When do you anticipate on releasing to the market the final technical review of Warro 3? [In the next 1-2 mths]

2. The 3D Seismic Survey was part of the original “free carried” agreement. Obviously this survey is of significant benefit to the success of the project so why wasn’t this survey already carried out during the earlier stages of the project? [Because we had 2D and it was more of a priority to drill the first appraisal well Warro 3]

When do you anticipate on releasing to the market when and if at all the 3D Seismic Survey will be carried out? ..[Once the timing is confirmed, in the next month.]

How long will it take until we receive the results of this survey? Is the hold up in making this decision due to Alcoa? [No this has no impact on Alcoa’s decision on Warro 4, survey scheduled for March/April 2010]

3. In your September Quarterly release you stated...“The testing campaign just completed has shown that rather than assisting gas production the natural fractures were acting as a conduit for water from shallower intervals”. Given this how likely is it that further stimulation will increase the contamination of water into other natural fractures? [In the quarterly we tried to emphasise that the natural fracture systems were deliberately targeted for increased gas flows, as this is the imperical evidence from producing tight gas projects. Unfortunately they became a conduit for the water. In future wells they will be avoided, not targeted.]

4. In your September Quarterly release you also stated...“Many tight gas fields produce water along with the gas and handle this mix effectively through the appropriate completion design. The Warro 3 completion was not of this type but future wells will use the Warro 3 experience and ensure any water can be efficiently removed from the well, to not inhibit the gas flows achievable from the reservoir” How economical is this option? If this option is possible does that mean that the full potential of the Warro Gas Field can be utilised or only certain affected areas with limited water? [It is just using different casing size and some completion equipment at surface- not a material difference at all in cost. The water in warro 3 would have depleted over time. The experts believe it is an issue that can be managed in the development of the field.]

5. Given all that you have learned from Warro 3, when do you anticipate on releasing to the market the drilling plans for Warro 4? Would it also be possible for you to announce a revised program for further testing and possible production of the Warro Gas Field? [After the completion of the final technical review by Latent, currently underway and due in a month, the plans for Warro 4 will be crystalised and we will update the market then.]

So my interpretation of his response is the following:

• Don’t expect any update before the AGM.
• Will not receive final Warro 3 tech review until at least the end of this year but more likely early next year.
• 3D Survey scheduled for March/April 2010
• Warro 4 will go ahead but not until after 3D’s
• And best of all...Water issue manageable and with minimal impact on budget!!!

We can all sleep easy IMHO but don’t expect any action for some time yet.

A few sellers into 1.4c today. How low can this go? Buyers are dropping off. Could we be so lucky as to see 1c before year end!? Unbelievable!

:)