Ann: Investor Presentation , page-2

Good informative presentation. Found the 'Milestones' section quite useful in getting a better understanding of where they intend to generate some cash flow from. This is quite imperative as the company only has $2.5m as at 30 June 2012. With spending for the next quarter estimated at nearly $1m and assuming spending remains consistent, the company only has sufficient cash for around 2 more quarters or around 6 months.

Based on the Milestones section, the earliest cash injection I can see is the monetisation of the Grieve Pipeline targeted for October 2012 (2 months time). Then they are planning to monetise some other assets in February 2013 (6 months time). Not really sure what 'other' assets they have to monetise though. These 2 targeted cash flow injections are however once-off injections and are unlikely to amount to much IMO.

After that, the next targeted cash injection in June 2013 is oil production from Ash Creek. However they are only targeting 100bopd so again, this is unlikely to make the company cash flow positive. They then plan on generating cash flow from their first EORGAS project in April 2014 followed finally by oil production from Grieve in June 2014.

No matter how I look at it though, I cannot see how they are going to get by without yet another capital raising especially if they are planning to acquire additional EOR oil fields/ projects.

Nevertheless, apart from dilutions from capital raisings and the opportunity cost of leaving your capital sitting idle in Elk shares, the risks for the company are reasonably low considering the fact that they are fully funded by Denbury for Grieve until production. So worst case scenario, they do nothing until oil starts to flow at Elk's 35% share of Grieve which is valued by Strachan Corporate at $55m (Elk's current market cap is $23m).

All IMO.