Just got back from the AGM and should probably take some time to...

Just got back from the AGM and should probably take some time to re-group... it was actually fairly heavy going.

The resolutions that were being voted on largely went through with no real disparity except there was obvious tension between the board (and shareholders) when it came to Resolution 10 (and 17 by default) regarding the re-election of Stephen Flanagan to the board. This resolution went to a poll, the result of which, will probably be announced via the ASX (by Damien Cronin - secretary) later today I guess... Mr Flanagan actually spoke rather well about the "conflict of interest" issue and when questioned about his involvement and potential future involvement going forward. He basically said that the "conflict of interest" he had raised with the board as an issue was regarding the 2 directors who are retired/retiring and he genuinely sounded passionate about being involved, and on the board in the future. He was disappointed to have been "shouted down" and that the board didn't properly investigate his qualms re: conflict of interest. Peter Cockcroft did acknowledge the validity of SF's response.

With 20 resolutions to get through it was a bit of a battle to wade through them - but - on to the "interesting" bit.

John Phillips (from here in called JP) gave a no-holds barred account of operations to date and future projections (and plenty of your previous questions were answered adequately I believe SeamFiend). Those of you who have gone through the presentation can probably largely see this for yourselves... Peter Cockcroft referred to it as "warts and all" and it was - but he insisted that will be their future strategy regarding information to market going forward.

Re: 814. Sapphire 1 - they believe that intrusions caused the Inert gas content that they encountered but overall they are very BUL-lish about the area's potential and were certain that this would not ruin their permits... I discussed this afterwards as well to confirm. They are certain of the coal and indications are that it is quite gasseous but they do have to tread lightly while they evaluate the surrounding structure (and they have to avoid some sections of what is a fairly complex structure). They know that they have good Permian coals around Monslatt, the collapse of Monslatt 1 was probably primarily due to high permeability (which we obviously want) but we should know more after they twin it (and determine the structure). Monslatt 2, as mentioned, is at 785m so shoudn't be too far from some results there too.

813. Should see some drilling by as soon as this weekend, Canaka 1 which will be drilled to 1100 or 1200m I think. 10 core holes first up to evaluate the basin with a view to a further 12 holes. Carolina 1 showed 91% methane which was encouraging.

Next, basically ATP854 does not sound good. There is low gas content and the Walloon coals encountered are sub-economic. The Cerulean 2 well was shut-in due to low gas and it would seem that the coals are too tight to be useful. JP, however, thinks that this is far from dead and buried (and I would like to think he knows more than me given his knowledge of the area, and involvement with the Lacerta field). I think their strategy sounds like if they do encounter some marginally commercial seams here, etc - to do some form of collaberation/JV with BOW and their Don Juan field or equivalent to achieve some commerciality having already invested the time and energy into exploring this area. Personally tho, and this is IMHO, I wouldn't be holding my breath regarding further potential/results from this block.

Next 818/896 - again low net coal - not very encouraging. Their theory was that the lower Tarooms held coal/gas content but that theory has proved to be incorrect. JP addressed the fact that people had been critical of their releases to market regarding this area but it was due to the fact that the block between BUL and Tipton West was still up for tender. Their minimal releases were based on their strategy of trying to determine the extent of the Tipton West reservoir and the fact that their drilling would have given them competitive advantage (which in fairness, they had earned by spending the money to drill). As it turns out, the coal/gas content didn't convince that they were on the fringe of that reservoir and so I don't think much more resources will be put into it.

Maryborough basin, native title holder discussions may be completed within a few weeks, and they're encouraged about the commerciality of anything discovered here - even possibly gas storage, etc depending on structure - given quite close to Gladstone. Obviously needs to be explored and evaluated.

SUMMARY (from my perspective)

1. Was interested to here that HB Lee (KOGAS) confirmed this was the first time they bought shares in an Australian company which was encouraging. It seems to be a strange choice on the surface but would seem to be based on prior knowledge of the Galilee basin and a desire to be involved in it's development.

2. Personally, when valuing what BUL might be worth - I will probably exclude 854/818/896 from valuations for now, pending further technological advances to unlock any potential in the tight coal seams. That being said, I'm exluding them from my 3P targets - and so hoping they can develop 700PJ by the end of next year.

3. The value in holding BUL has definitely got to be in 813 and 814 (in my opinion only). Galilee Basin in particular is highly prosective, but not close to any infrastructure or market but KOGAS involvement will alleviate that problem if gas is discovered at 813 as they have the ability to fund the pipeline to get the gas to market.

4. The strength of the board was not easy to evaluate, particularly given that a few of the faces were at their first AGM. John Phillips, however, (I believe), has an excellent grasp of the industry, and great experience, and so long as he is heavily involved in planning their way forward - I think there is a good chance of success. While some of what he said was confronting, I actually really enjoyed the honesty with which he delivered the information to the shareholders present.

5. There were definitely disgruntled shareholders in attendance. I knew a couple of others there who are choosing to sell down until there is some indication that 813 and/or 814 contain commercial amounts of coal/gas. I think this is a little strange given the drilling program but I can understand it also. I have been a net buyer of late because I'm encouraged by the accelerated drilling about to occur at 813, and thought BUL had been sold down a bit far, but I'll probably just sit on what I hold for a while and wait til we can evaluate these permits further.

6. Encouraged by the $41.8m cash on hand that they can complete the programs they are targetting.

7. Was interesting to hear Peter Cockcroft close the talk mentioning looking at potential aquisitions and strategic mergers with same fit companies in terms of strategy, ideas and/or property. Hopefully (for me anyway) this would only be to commercialise one of the less economic fields such as 854 and not selling out positions in 813 or 814 before properly realising their potential. He also mentioned looking at mid-stream commercial solutions and different technology (mini-LNG and others) to develop a cash-flow - will have to see how this pans out in the future.
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Think that's about all I can offer from today's meeting. Personally, I just want to see solid results out of 813 and 814 (ASAP) and particularly before June next year and would like to see the relationship with KOGAS develop further based on great results from 813.