Ann: Cyrene-1 Update of EP438 Activities , page-22

Hi Philley

If you look at the cost for the recent OBL well that TD around 1,160m was $3.6 million using the Dynaimic Rig 7.

A mordern rig.

So Key cost is $6.0 million with the Buru joint venture paying, which includes lots of coring and testing hence more money using a rig that still awaiting final Government approval. Kingsway had a hard time getting its approval to use DCA 7 in 2004/5.

So my concern is that Key is potentailly exposing themselve to a rig issue which they didn't need to do as for the same money they could have had Dynamic Rig 7.

Thats all.

Hopefully the rig will be approved and the drilling done successfully.

PS Just because the rig has not been mobilse there are other day by day cost to be paid for as you await the rig to arrive, such as staff already onsite, other third party equimpment etc. These can add up!!