Santos East Coast playbook, page-17

The chance of COI becoming a stand alone producer at Mahalo is almost non existent unless COI’s either buys out either/both Santos/APLNG 30% share which although not totally impossible is extremely unlikely – or – works a deal whereby COI takes Mahalo to production kicking back 60% of net production to Santos/APLNG which is equally unlikely.

Mahalo will be brought to production but before that point either we will be bought out of our 40% share – or a deal will be struck whereby we get 'free carried’ to production with our share of the upfront Cap-Ex to get us to that point being accounted for against our share of future production – alternatively we will be stumping up our 40% share of that cost to get us to that point.

I believe it’s too messy for the likes of Santos/APLNG to have COI sitting with 40% of the gas in Mahalo – they were happy to let us take the risks getting it proven up knowing that if we didn’t hit certain set objectives - that the cost that we bore on their behalf would not be refunded to us. We hit/exceeded those objectives and we were refunded.

Moving forward having used COI to take the risks – they will surely want 100% of the future rewards and a deal will be cut – the shape/size of that deal will unfold when the time comes.

All a matter of timing – ‘when' rather than ‘if’ - in my opinion.

As to whether COI will be split down the middle with just Mahalo being sold off or whether the whole company will be taken out – that’s the big question as I see things…