solimar, page-6

Well (no pun intended) the current Ventura drill estimate (of recoverable reserves "potential") is 46 mio barrels, and as the statement of 10th May pointed out a budget of U$3.5 mio is already set aside for that - which includes possible (now current) side drilling and the sinking of two new wells for recovery. You are right in pointing out that this is an "easy win" for LPL, but we also shouldn't forget about the other targets on their radar.

Take into account also the Ventura South Flank (200 mio bbl potential, 22% share of payback), the drill at the Midway-Sunset Field (the "Maricopa project") which will not commence until H2/2007, and the Aquaduct Fan Prospect (10% of 200 mio bbls). One doesn't need to be a mathematician to work the numbers on that lot.

For the time being, however, I think their focus will be on the Ventura well(s) - they really need to bring this baby home to cover the costs on the others without the need for additional capital. These are smart guys (with good pedigree) and I am confident they have picked-off the lowest lying fruit from the tree in order to ensure they can go for the higher placed (and yielding) fruit later.

I wouldn't be so brash to call this one a no-brainer (as people who usually say that have exactly that!) but this is like having six balls to bowl each frame at a tenpin alley. Even the break-up value of the company is around 9.3 cents, so at 20 cents the premium is hardly large when you look at the upside (in NPV terms) from even one of these fields coming in.

(All uneducated personal opinion, of course)...