Ann: Quarterly Activities Report , page-4

I have to admit that I lightened up this morning (though I still hold a large parcel).

Positives

1) high likelyhood of success based on
a) 300ft of ML on property
b) Success of Range Resorces next door
c) Access to Technical data from Range Resources

2)Directors buying after the end of the quarter. They must have a fair idea of the details that lay behind the quarterly

Negatives

1) Ongoing poor production. I think the new staff and consultants are an acknowledgement of poor outcomes to date.

2) Cash burn could have been mitigated by reasonable production. Instead they are eating into drilling capex.

3) They have about $6M for the next 6 months including the remaing investment from IcoFund and selling out of SXX. After admin / production costs that leaves about $4M left. Enough for a few verticals but what will they produce?

They REALLY REALLY REALLY need to stop the cash burn. Move to 500BOPD and they will have enough to cover overehads and fund a vertical drill program with cash flow.