Shorters are closing out, page-62

Hey Hotazel good to hear from you

If you look at the last presentation by CNE they state the NPV per barrel of the reserves at different prices of oil e.g. $50, $70 and $90. These values are not valid until FID as you see the statement on the side of the table. So I started to think that once the final investment decision is made that would lock in these values. I am not sure of the process but believe that the JV can pull out of development up to the FID.

Between now and then the value of our leases will be increasing depending on the size of 1C and 2C or if they convert to 1P and 2P, the price of oil and the cost of development. Until we get a FID the market will play with the SP justified by the risk that the development will not proceed even though that risk is reducing by each well.

I have seen many so called re rating events come and go will little impact to the SP, and I agree with Tony that only the SP matters but if we get to a FID and that's one big if then at that point the risk excuse can not be used and the SP should be higher.

Hope this explains my point of view and that's all it is an opinion

Zip