Sydney IP, page-24

Fantastic effort H,

There is always a little more to be garnered from different eyes and ears.

Source Rocks ; I think we all knew they were "world class and prolific"-- that little bit about a high TOC was nice though.
The age, extent etc remain in house--I'm getting to like that "tight hole policy"--sorry, information deemed immaterial.

Cost of upcoming drilling campaign ; I was probably underestimating our share of the costs--13.7,15 & 16.7% stuffs
my head around a bit at times. Our paying interest of course is 16.7%. I seemed to come to the conclusion that only 1 of
those appraisal wells would be tested and flowed, not sure why I formed that opinion but anyway ;

SNE2; 35 days to drill x $950kpday + 25 days testing x $950kpday = $54m
SNE3; 35 days to drill x $950kpday + 25 days resting x 950kday = $54m
Ex well ; 35 days to drill x 950kpday = $33m

Total cost $141m-- FAR's [email protected]% = @23.5m
Leaves approx $60m left over {if budgeted for $200m total} for cost over-runs, probably more time on the Exploratory well
for samples, testing etc, so that seems about right--FAR would be budgeting for $33m their share--I'm hoping to have cash
left over from that $33m, but best to be prudent and cautious pre-drill and budget for $33m. I can now see the need {including
perhaps a farm-in for more acreage}, the need for at least $40m pre drill.

Prospect Inventory, Exploration well and NPV: Yes, it will be interesting to see which prospect will be drilled first.
Cath was of the opinion that CNE"s 80% COS for Bellatrix was a tad exuberant, more like 50% she thought, but still
outstanding odds for a prospect. Sirius & Soleil are targeting the same sands/reservoir as SNE which appeals, however
Bellatrix would aid substantially in perhaps deepening the reservoir of SNE and help prove up that P10 of 670mmboo.
Decisions, decisions.

Nice to be able to put a ball park figure on the NPV should those prospects be proven up. Obviously the current NPV of
$10boo would rise if more barrels could be tied back to our predicated 330mmboo--I would assume if 1bboo could be
proven up then NPV as you say could approach the $20pboo mark @$70 Brent. Imagine a $100 POO environment and
our share of 1bboo--I will let others do the math--it frightens me too much.

Share price catalysts: Yes, POO/sentiment, farm in to new acreage on good terms and possibly confirmation of those
lower rig rates locked in pre-appraisal at least. Drill bit will do the talking post appraisal hopefully.
I did push a bit as regards to an update on SNE as you know--the conversation went something like this--once again
my memory is usually pretty good but this is from memory only with no notes.
CN: "Working on those thin sands that were not included in the current map/schematic.. {the ones that can hopefully add 30%
to current volumetrics}
Me; " Do you expect that work to be completed and released pre-appraisal?"
CN; Well.....you know.....work is probably going to run into August etc.....we are only guessing at this stage....
Look, I DONT want to release it"
I would conclude that their analysis would probably be finished on those thinner sands prior to appraisal with good
results on "paper" we hope, however it is fair to assume that the drill bit with a flow test is still required to make good
those paper results. " We are only guessing at this stage" seems a fair call--even though that guess may be very well
informed, mention was made about having to rescind that if flow testing proved otherwise. Fair call overall.

Thanks again H and looking forward to any other slant that may eventuate from the GC IP.

GLTAH