M;Perhaps we could refresh both of our memories. Let's start...

M;
Perhaps we could refresh both of our memories. Let's start with the VR 257 well that was a dry hole in mid 2006 (hope that's correct). If the quarterlies and annual are correct there were originally four (4) wells to be drilled from that new caisson. Two for sure and potentially two (2) more. The first was to something they called a "channel play" that, if successful was a 30(?) to 50(?) BCFE potential target. The other three (3) wells, potentially, were to be drilled back into VR 258 to find 14(?) to 18(?) BCFE in agregate. After the channel play DH, the rig was released immediately. If I recall, the two plays are not geologically connected in any way. They were separate plays. You tell me.

If my old memory serves from reading the 4thlies and annuals, the Focus Group put together two wells for the partnership. The first (1st) was the S. Terrebone dry hole which PSA participated in. The rig then moved to another well which PSA elected to stand out of. That second well is supposed to be a very good well.

Sometime later (a year?) PSA backed out of participating and operating a well, as I understand it, in a partnership within a week or two of the well starting. That well was apparently drilled by the remaining partners and was also very successful.

I am not certain if you will tend to agree or not with my interpretation of the two (2) heralded recent Moonshine wells or not. Two relatively expensive onshore wells brought, according to my reading of the annual, 1.3 BCFE aggregate to the bottom line. I suspect, perhaps incorrectly, that if they are not selling the gas as part of the hedge that could be considered by some as a tough payout. And therefore, IMHO, "dry holes by another name?".

One might wonder what the success rate would be if everything "pre" the VR257 "channel play" dry hole is used and then everything from that well forward. I suspect that you would be at 90%+ "pre" and <20% ante.

Everything I've written here is purely my humble, lowly opinion. IMHO, the severe lack of management across the pond, by definition, allows the G&G group to persist intact and unfettered. China operates essentially devoid of PSA G&G input and is therefore reasonably successful. Your assessment of China rings true as probably the only value the company has. M, more than once you have seen my refrain about PSA's production decline curve running head on into the 10-12 straight dry holes. I, IMHO, believe that it is not, indeed, the light at the end of the tunnel....it is the freight train coming.

The telling slide is #17, how in the world that ever got weaseled into the presentation is totally bewildering to this munchkin. That had to cause considerable heartburn in several positions in PSA USA.

P