simon drake-brokman vote, page-4

Before the general meeting, I'd like to point out a few things to punters here. I do not know any of the board and don't agree with all their decisions and also think that Mr Fowler was much overpaid.

However, there is one thing that, imo, overrides all other mistakes of the board. That is the decision to go with Shell on the FLNG development rather than go it alone. I believe this is the one major factor which will actually save this company which otherwise would have ended up stymied in a nogo development zone.

Look at the major factors now developing in the oil, gas and coal markets of the world and in addition the exceedingly high cost structure of developments in Australia.

The US is well on the way to fossil fuel energy independence for a number of decades. International explorers are increasingly looking to low cost nations for obtaining fossil fuels, particularly in Africa and parts of Asia. Iraq is on the way to rivalling Saudi Arabia in oil production. Australia is now in the increasingly business destroying grip of Union power which has put Australia into no. 1 position in the world as a high cost place to do business requiring major capital development.

What does this mean for gas/oil developments? Any new onshore processing developments will be increasingly hard to justify econonically given our high costs and international competition. Small players will be completely left high and dry and unable to compete. If Nexus had gone ahead a la RC's development plan it would be facing high costs, increasing competition and a very limited time to recover funds. It is not unlikely it would have failed.

The departure of RC and rejection of his plan by the board set the scene for a change in direction that now, imo, in conjunction with Shell and their offshore floating facility with locked in contracts will see a good return for the company plus the option to develop Echuca in conjunction with bigger players.

For this move which required patience and determination and which has taken a long time to come to fruition, I believe the board are to be congratulated and in the main deserve to be returned.

Many on this discussion board will not agree because they have lost equity and ascribe it to actions of the board. The other side of the coin is that if the RC plan had proceeded there would have been a great sweep of enthusiasm, great for traders, but which would have worn off by now as the realisation would have set in as to what difficulties the company would have been facing - and the economic difficulties of it likely leading in the end to very significant further destruction of shareholder value.

Be thankful, I think, for what has eventuated!