Ann: OEL: Winx-1 Drilling Update, page-136

on that point, Do you think a CR could be part of a FO deal ? as in announcing the FO and terms is conditional on 88E tipping in some funds for the drill program - what ever it may be ? 3-4 drills etc ?

Hi DB....I think every FO agreement has an explicit contractual funding obligations from all parties. But I would be surprised if it stipulated "how" 88E was to source those funds. Our cash contribution obligations will be linked to working interest. Of course, as the farmer, 88E may have a portion (or even all, in the best case outcome) of its working interest contribution to the farmed drilling programme - free carried. We may also get a cash payment up front as some reflection of previous expenditures made to get to that stage. Huge spectrum of possible outcomes. While a CR won't be a condition of a FO (IMO),the terms of the FO will make it obvious to us all as to when and whether a CR will be required to meet 88E's cash needs. Those needs being not just obligations under the FO, but also costs to keep the lights on and the bills paid. Need to bear in mind that there could be quite a few months between an FO agreement being signed and the first cash consuming activity under that agreement. And that through pre-spud prudence, we have some cash in hand. DW may have the luxury to wait for a better time to CR than in the immediate aftermath of a duster.

All IMO.