This is Sir Lincoln Augustus, first second cousin of...

This is Sir Lincoln Augustus, first second cousin of Holymagiman

Hello everybody. I see that Holymagiman has been writing a lot of high class stuff on the Sapex site, which a few of you may find hard to understand as it is so high class. That is a shame, and I hope the lot of you improve yourselves so that you may understand him better.

Anyway, why is Holymagiman so excited about Sapex? For a few reasons, which I will try to summarise for those who are a bit slow on the uptake, and especially for those whose understanding of plain English is poor.

Firstly, Sapex has entered into an Underground Coal Gassification programme with Linc Energy. This programme will start later this month. There is an estimated 5.69 billion (yes, billion) tonnes of coal as inferred resources just in the two Els, namely EL 3325 and EL 3326.. If the UCG proves to be a sucess, then there is a lot of money there, buried in Sapex's coffers.

As i said previously, this programme starts this month.


Secondly, Sapex has farmed out 25% of coal bed methane interest in PEL 117, PEL 121 and PEL 122 to Eastern Star Gas The Company entered into a MOU to farmout CSG interests in three PELs. Eastern Star Gas will drill a corehole in each of these PEL at its own cost. So Sapex will retain 75% of the coal bed methane rights and the initial exploration costs will be borne by Eastern Star gas. That seems alright to me and Holymagiman.

And that still leaves Sapex with 100% of all the coal bed methane in the remaining PELs. That sounds even better to us.

This drilling by Eastern Star gas will be in this quarter.

Lastly and a point that I think not enough people understand, is the significance of the Boorthanna 2008 Seismic Survey. This has been a long time coming, and hopefully recording of data has commenced today. I feel that South Australia's Arckaringa Basin has great potential for oil discovery, much like the Cooper Basin.

I did, on a whim, phone and speak to Mr Andrew Andrejewskis some months ago. I asked him about when the petroleum exploration was going to commencet and I felt that he gave me a rather negative answer then because he told me that Sapex was not able to procure any drill rigs in the foreseeable future.

The story has changed somewhat now. Apart from the Seismic Survey, Andrew has told me in a recent phone conversation that Sapex also has plans to drill two petroleum exploration wells by the end of the year. This is detailed in their latest report, and what it means is that sapex has secured the drills. Great news.

That is what has excited Holymagiman and fired up my interest. While the UCG and the Coalbed methane plays have substantial upside, I feel that what will make Sapex into a major company is the petroleum play. The end of the year is less than eight months away.

Anyway, that is how Holymagiman and I have interpreted the direction Sapex will take, and we both feel that this is the company with the greatest potential among the CBM crowd. Others may seek to differ, and only time will tell.

Anyway, I hope that I have clarified Holymagiman's thoughts for those who are unable to think on his level.

God bless and may thy table ever be bountiful

Sir Lincoln Augustus MA(ox), MBA (Havard), PhD Phil, LLB, FRCS (Edin), OBE, Knight of the Holy Garter, etc etc