re: petsec post agm lunch... Re question 2 - Looking at the...

re: petsec post agm lunch... Re question 2 - Looking at the quarterly reports, I would say at least some of the expenditure associated with bringing the first 3 West Cameron wells into production hit Q1 2003. In Q3 it looks like most of the drilling cost associated with the 2 further WC wells was classified as "development". During this period the earlier WC wells were also worked over, and then in Q4 a "caisson" was installed in the Vermilion block prior to drilling the 2 exploration wells in that area. It's also possible that drilling cost for the Vermilion wells has been classified as "development" given that they successfully proved up reserves.

Overall, it looks like 2003 carried significant development expenses associated with wells drilled in 2002, and also for the Vermilion wells which have yet to come into production.

Still it would be good to confirm with the company what gets classified as "exploration expense" and what goes into "development".