Ann: Annual Report to shareholders , page-11

Superhard - you asked why should we keep Tanzania.

It is precisely the reason that you have stated why we shouldn't. That is where the growth will come from. What else do Key have? We'll lets analyse:
1. An underpeforming, over capital intensive, 2 partly producing holes in the UK
2. Tennemants in Italy which we can't really do much with right now because they are either in middle of built up areas, or off coasts where drilling is currently banned! (Southern tennemant the exception
3. Wildcat drilling in WA.
4. Tanzania 50% of West Songo Songo, and 20% of Nyuni.

UK doesn't mean anything unless they can get production up to what they are saying. Italy - well that is stuffed for the short term - so nothing happening there. Wildcat drilling - well this is a high risk high reward. Pull it off and get the 400BOPD they are suggesting, and I'm sure we'll all be laughing.

Tanzania for most of us is where it is at. They already have found 44BCF resource in place near existing infrastructure. They found GAS and oil in NYUNI 1 but couldn't do anything with it for technical reasons.

That is precisely where we should stay! Especially if oil is around like they said. Nyuni island has it seeping out. We just didn't hit it when we drilled, which is why they are going back to the drill hole, and utilising it for further drilling!

What they should do in my opinion, is look at divesting part of West Songo Songo, so down to 25% stake in consideration for free carrying to one drill hole (which has to be drilled by middle of next year). Shallow hole (cheaper), close to land, in a gas proven area - who wouldn't want in? Nyuni we should hold onto. Especially if commercialisation is a year away.

But in reality our hopes and short term share price, rest on the Wildcat drill in WA. If it succeeds, and we can commercialise it short term, then cash-flow requirements from a cap raising may be reduced. If it fails, then there will be massive consequences for the rest of the company and its prospects!