Ann: Commsec Investor Update Presentation, page-6

Hi Cmon



Take your point about task completion but there is no comparison between BCC and ELK apart from the fact that Anwar was in BCC and is in ELK.


A number of points

1) It is in Denbury's interest to complete on time as they are also a JV partner so they will also lose out in terms of revenue if they are delayed.

2) Even if there is a delay till mid 2018 before revenue from Grieve comes in, it may be material as far as the 2018 FY year is concerned but it will not be material going forward after that. The contract Brad renegotiated with Denbury has specific hurdles ( activity and timeline) they have to meet before they get paid and so far they have delivered.

3) Both Grieve and Madden will require very little sustaining capital expenditure and no exploration spend. ELK is fully funded to production start and a delay in project completion will also mean a delay in payment to Denbury so net cash outflow will be immaterial.

Your email prompted me to call Brad and reconfirm that all is on track, which he did.

I understand BCC has finely tuned your BS radar as far as management is concerned ( it certainly did for me) but at this stage, there is no " divergence" as such between ELK and Denbury.

Can I promise you I am 100% certain Grieve will be in production by April 2018 ?..... I cannot.... but due to the nature of both assets where they are long term producers which will spew out significant free cash flow , a delay in Grieve start up of a few months is not a deal breaker for me.

At this stage ELK are trading on a prospective free cash flow to market cap ratio of 2, whether this is achieved over a 12 month period from Jan 2018 to Jan 2019 or 6 months later is not a long term issue. If a delay causes the SP to fall then that would be great because I want and will have lot more.

Good luck, I hope you do a lot more digging and comn board.

Cheers

Dan