state of health, page-3

metall,

This has been a disappointing stock. My view is that regardless of indicators such as NTA, unless the company can redress its past production failings and get oil flowing at a steady rate to give the market confidence about the resource, the SP is going nowhere.

So far production has been either disappointing to negligible, exploration results have not provided any hope for the future and cash resources are steadily dwindling. I have serious doubts about the ability of the Puffin fields to produce at a reasonable level and the impression that is being conveyed to the market by AED is that very little is happening to redress the situation. Here are two extracts from AED's quarterly report for 30 June 2009:-

"The Company has been encouraged by the potential of the Great Auk‐1 results and will undertake further
geological and geophysical analysis including seismic reprocessing and acquiring new 3D seismic over the
entire AC/P22 and AC/L6 permits. Such a seismic survey together with the empirical data from the 19 wells drilled within the permits will be utilized for formulation to direct future drilling and create field development scenarios, while also evaluating the Company’s Reserve and Resource portfolio"

AND

"The 3D seismic acquisition and reprocessing referred to in this report are anticipated to commence in this
quarter and amongst other outcomes are expected to delineate leads and prospects suitable for future
drilling programmes"

As we enter the final week of the quarter we have heard nothing from AED about arranging the seismic above let alone its commencement. Recommencement of production in the short term will not occur and even the medium term looks unlikely. In the interim, cash resources will continue to errode.

If u want to take a closer look at AED I suggest that you look at the 2009 Annual Report which must be due very soon. The last quarterly will give you some info on their cash status. If u look at the announcements for the last 12 months or more u will struggle to find any successes. I hold in the hope that I may find an opportunity to sell down my holding when it may be less painful than now but the position is under constant review. I recently cancelled a sell order on half my holding as the SP continued to decline. The SP spike to $1.20 in May is now viewed as a lost opportunity.

I suggest that u look at a chart of the SP for the last 3 years which perfectly encapsulates the history of AED. If u are a contrarian u may be tempted by the current SP but only if u believe the prospects of a turn around are good. Needless to say, with the benefit of hindsight I would not have invested in AED.

ANZ