Ann: Alaska Projects Update, page-40

LOL Doc. Perhaps you should take a deep breath and re-read the ANN. Oil to the West?? Where? I must have missed it!! Sure, there is lots of planned 3D seismic activity looking for signs of oil - but no oil discoveries west of us. North and North-North-West yes...but west? Happy to stand corrected. Meanwhile our little shack in the housing commission has modern 3D seismic completed and processed. Inversion processing of that completed too. Over 2b bbls conventional target/leads/prospects nett to 88e in there. And now we have a 3rd party (of unknown calibre) bidding to fund that hopeful discovery process. Sounds like we are a few steps ahead of that more western acreage in terms of having anything to chase.

Serendipitous if you ask me. That the acreage that we hoovered up chasing the HRZ thermal maturity sweetspot (and which remains WIP) should indicate over 2b bbls (nett to us) of conventional prospectivity on the back of 3D seismic. Hell of a bonus to chase.

As to the tier 1's having left the building.....that remains to be established. While I would typically love to have a tier 1 FO partner....I'm a bit bipolar on that. Tier 1 partner has less funding issues and also represent a ready made buyout path if the FO deal bags a discovery. However, a smaller (perhaps consortium) of FO partners may still be able to provide the initial funding while leaving more meat on the table for the farmer. Meanwhile, a genuine discovery is still likely to find the right tier 1 to buy out at that stage. But this is all just idle speculation, because you, I and everyone else reading this doesn't actually know what may transpire. And if it funds the drilling of Bravo and Charlie, who cares what tier our partners come from.

FY DocI...on two similar property auctions I have recently observed on the same day, one had multiple registered bidders and a crowd of onlookers and failed to meet reserve, passed in...and failed to make a sale later in the day with any of the under-bidders. The other had only two bidders and a small handful of gawkers, and also failed to make reserve, but the highest under-bidder then went on to conclude a good deal a few days later under non-auction conditions. Guarantee you that at the start of the auction, the vendor with the crowd was more upbeat than the vendor with the two bidders. Moral of the story is that it is not the number are the calibre of bidders that make a vibrant market but the genuine interest of the bidders. And here, we don't know enough to speculate.

For me....nothing has materially changed with this ANN. What has changed is elimination of some uncertainty as to whether we have a bidder in the room. That's it. An announcement that was necessitated by the earlier extension to Q1 2019. No choice in the matter. Said what needed to be said and nothing more. The only people who could be genuinely 'upset' by this announcement were those who were looking for a quick out and were hoping for an ANN inspired spike to sell into. Not sure it is the BoD's job to pander to that. Those holders that are either content or at least reconciled to waiting for the right FO deal, probably view this ANN with a mixture of nonchalance and relief. This story is still being written.

All IMO & GLTA.