Ann: EGM Presentation - 31 August 2012 , page-26

Thanks everyone for the meeting updates and views. REALLY appreciate it!

Several positives:
1. TXN is signalling that will be become more active with actual production to raise P1 reserves and thereby shore up preparedness for sale. Hopefully TXN will demonstrate that it can come to life after dormancy.

2. The board got the message (maybe) that TXN is not a retirement plan or pork barrel. Glad the issue of Wandoo's possible conflict of interest was raised (though ASX would have recommended replacement of one or more directors, in my opinion).

3. Potential for upward rerating on production (RBS estimates 3k boepd from 12 wells) and revenue/profits.

4. Shareholders learned why the sale has not occurred. I concur with their decision not to sell under these circumstances, but... (see EF Sale Arguments below).

EF SALE ARGUMENTS
Are these guys new to the oil business? I'm a rank amateur, but even I was shocked by the alleged naivety TXN seems to demonstrate here. Sounds like a few attending were equally cynical.

First, yes Chesapeake is seeking oil leases to make up for its gas glut, but surely TXN knew the company has financial woes. It's been in the papers since January. Second, everyone watches next door's results and talks up them up when they're good. So how could TXN be surprised (and unprepared) for the poor next door results in this sale? Third pooled land is the norm in this business so how did TXN overlook this? (Maybe the problem here was that adjoining land was already leased, so "pooling" not through mandatory owner leasing but through joint ventures?)

HEAD SCRATCHING QUESTIONS:
I can't figure out why TXN1 and TXN2 is a "new" idea when it was recognized as a tax-favourable strategy before the sale started. Why hasn't TXN demerged already if its plans are to sell EF eventually? Selling old ideas as new ones to shareholders doesn't help here. Just do it if professional advice recommends so.

How does RBS claim that Wandoo "gives Texon access to prospects generated from a few hundred million dollars worth of seismic"? My understanding is that Wandoo gets the data from a company that publicly sells these seismics. Further, RBS says TXN has "access to a massive seismic data base and exerienced professionals evaluating it". I respect Mason's expertise, but isn't Wandoo mostly using contractors paid by TXN shareholders at $125/hr to do the professional work?

Overall, maybe enough fire under these guys to make this a company again!