response from head office, page-12

Hi Acreage

"when it comes to the slightest chance of someone taking legal proceedings against you I would say you would absolutely do everything by the book and cover your arse,just incase that 25/3/12 date does involve GGP.Other than that I have no answer as to why the hold up with ann's.Maybe the delays on ann's are just that !the gas locking,change of pumps,awaiting finality of the horizontal design ( now done ) etc etc"

I largely agree with you on that but If they are holding up flow rates (and Im not totaly convinced) it would have more to do with land purchase than any legal dispute.

But looking at updates we have had 6 this year incuding the Quarterly and six month accounts. Thats averaging two a month.Im relaxed about that. They dont actually have a huge ammount to update us with as they are largely in testing mode.

The thing most hang out for in updates is flow rates but at the moment we only have one well that is flowing as normal thats SRH 3 and they are giving rates on that.

The other three are in different stages of testing and two of them if not all are to have more Fraccing. To be giving rates on them would be worse than having none. Each report would have different rates as they test different intervals. Some wells might flow less from one update to the next as they change intervals or pumps etc.

I dont think we we will get updates on individual wells untill they are flowing as normal production units as is SRH 3.

At the start of next month they are fraccing SRH 2 And SRH 4 back to back and SRH 1 if it doesnt require any more Fraccing should be finished testing.

By some stage in April we should have three if not four wells being run as production wells. Bring it on.

So if we take the Updates to date as whats been happening then Im fine with that, there really isnt much more they could say that would have any great relevance.

I would have liked to known earlier from them what was obvious to us and that is that the drilling was getting behind. But maybe it was so obvious they didnt think it needed to be mentioned. None of us are perfect at least we now know why.

The effects Any other issues such as land purchase, Jv and Legal have on the above is beyond me.

Personally Im happy with the way things are going although a little frustrated. The thing Im looking forward to most is a new drilling program.

Management need not be afraid to adapt to changing circumstances if it improves our future just to keep shareholders off there backs.

Cheers Whisky