Ann: Sugarloaf Operations Update , page-5

OGG,

It's good to see a flicker of info about the future drill program. However, does that mean AUT has to contribute $'s to fix the stuff up of Kowalik ie it becomes a non farm in well.

It's amazing the huge difference in flow rates between morgan and easley. Confirms your beliefs on AZZ. The pay back period of morgan will only be months. A couple of those in Turnbull and it's happy days.

Which begs another question. In the farm-in agreement, is Hilcorps payback for the costs before the jv's see a cent, calculated per individual well or for the whole program. For example, are we going to see revenue from Morgan soon or is the extra revenue from Morgan going to go Hilcorp first until they have recovered all their costs for all their wells?