update time

Price (as at 27-Dec-06) $0.39
Market Cap $70.9M
Cash (as at $13.0 M as at 30 Jun 06) $12.0 M
Cash / Share n/a
Shares Traded (pa) $64.5M
Status:

Summary activity for the current quarter Quantity Budget
Exploration Well None
Appraisal Well 2 $1.1
Seismic Surveys 1 $0.27
Other Production testing & completion testing $0.50
Total $1.9

Top Shareholders
Arredo Pty Ltd 6.5%
TP Coffee & JF Gresson 5.3%
TP Coffeey & JF Gresson

North San Ardo
Location Onshore Salinas Basin, California Heavy oil project owned and operated 100% by Salinas, with resource potential of 3.5M to 10M barrels of recoverable oil. Adjacent to the giant steam-assisted producing San Ardo heavy oil field. Salinas have already drilled one appraisal well, proving an 80-feet oil column. Seismic in Nov will precede a 4-well development program, leading to a pilot production project by Q2, CY ‘07.
Commodity Oil
Style of Structure Anticline
Reservoir Target Lombardi, Sandstone
Windgap
Location Onshore San Joaquin Basin, California Salinas 42.5% and operator. At least 2 gas sands drilled in appraisal well Wingdap 42-36. Production testing program to begin in December using a workover rig. Resource potential for the project is up to 60bcf gas and 6mmbbl of petroleum liquids (oil and condensate).
Commodity Gas / Oil
Style of Structure Anticline
Reservoir Target Vedder Formation sandstone
North Yowlumne 1-26
Location Onshore San Joaquin, California Potentially large, new oil discovery north of the 110mbbl Yowlumne oil field. Test results indicated commercial flow potential of medium to light crude (32-36 degrees API), but production testing has not lived up to expectations. Non-ideal down hole conditions in the well have been a factor, and a review of 3D seismic may reveal a better location to test the trap. Salinas has tied up a large amount of acreage on trend where it maps follow-up leads and prospects.
Commodity Oil
Style of Structure Stratigraphic
Reservoir Target Steven Sandstone
Aegis Equities Comments
Projects:SAE has two operated wells suspended as potential future producers, a great start to the North San Ardo and Windgap projects. Being heavy oil, North San Ardo will require steam injection to mobilise the reservoir; however, this is a common production technique. Production testing is underway at Windgap; close proximity to infrastructure will enable quick and cheap commercialisation. Operational issues at Yowlumne have disappointed, but the potential is for a large oil resource.
Potential:The onshore basins in California have a prolific oil and gas production history, with hundreds of known fields. Exploration stagnated in past decades during periods of low oil and gas prices, but now there is significant potential for nimble operators to generate healthy profits. The 80 feet of oil intersected at North San Ardo is a confirmation of both the ongoing potential in the area and SAE’s ability to identify prospective targets.
Overall:SAE has moved to strengthen its board in recent months and has also set up an office in California. Recent acquisitions have provided the company with over 35,000 acres to evaluate, most of which it will operate. The three projects currently underway have all had encouraging starts, and despite some technical issues, provide real potential as revenue sources. With over $10M in cash, SAE is well placed to pursue its operational goals.

Bring it on 2007.