Ann: Quarterly Cashflow Report , page-12

Davo22,

Why?

The company will be wanting to raise a certain amount of money. IF you want to hold the same percentage of the company afterwards as you do now then you will need to put in the same overall amount of money at 5 cents as share as you would at 50 cents a share. You still have same percentage of the company.

If you don't put in the same percentage and put in slightly less then the lower the issue price of the share's the more your percentage holding is going to be reduced.

It was the 2 big holders who wanted the share consolidation as far as I can gather, so I doubt they want any more shares to be issued than is absolutely required.

Gaps,

I don't think they are going for the development plan as it was 6 to 9 months ago.

From the quarterly report

"the company is planning a capital raise in mid-2012 of sufficient size to achieve the following objectives of
(1) putting J-51 & J-53 wells on Trial Production
(2) drilling of the J-55 well and assuming it is a discovery, completion, testing and applying for a trial production licence.

They are doing it in stages to cause as little dilution as possible but add as much value as they can.

Going by the above list I'd be looking at a capital raise around the A$15M mark quite possibly less.

If you look at the quarterly cash-flow report they only estimate outgoings of A$2M in Q2 unless they accelerate the drilling plan. Of this $754K relates to production costs, ie transport etc.

I don't think there expense's regarding oil sales will be that high, we know about $6 per barrel for transport and storage, but they have little infrastructure at the well sites yet, and the oil from J-50 and J-52 flows by itself by the looks of it. So much of the $52 received per barrel will go into the bank account. It will not all show as profit because they have to account for Depreiation and Amort, but those are costs already sunk into the well while drilling and completing it.

LOTM