Courtesy SeaHawk on the LSE board: The interesting things I took...

Courtesy SeaHawk on the LSE board:

The interesting things I took form the presention.

IW2 did show a small amount of oil from the top layer of the HRZ before they opened up the bottom layer as well. This was not announced at the time because it was not enough to get everybody excited.

The of loss of Paul has had a large effect on the companies amity to work out what has happened with the HRZ. They are reworking all the data which has been gathered from the very start of IW to try and understand why it has not flowed yet. There is a five man team on this task and help is also being provided by friends of Paul.

First thought are that the lower HRZ appears to be much more gassy than the upper layer which it would appear to have the oil. Because they fracked the hell out of the lower level (75% of the propent was used here) it ended up puncturing the upper HRZ and this gas from the lower level is interfering with flow from the upper level. This is still conjecture at this point. However all the reworked data will in the data room for the HRZ farm out (hard data room open before Xmas).

Virtual data room has been open for a while on the western block and the hard data room will be open for WB next week. He is looking for a lot from a farm in and is only open to major companies at the moment. Looking for at least 4 drills, more 3D, refund on cost of 3D done so far and I think he said some cash as well. If he does not get what he wants from a major company he will open it up to their 2 companies. He seemed pretty confident but made it very clear at least twice that if a major company was very keen but needed more time to review the data etc they would be given that time.

On the Winx deal we got a very good deal as it was a distressed position for OTO. If we strike oil there is plenty of infrastructure near by that they could tie into and we may become producers, but non of that has been decided yet.

Early results from the 3D on Yukon (which is an even newer type of 3D which is taking longer to compute) is showing much better results that expected eg potentially much more oil. DW is quite excited by it as we appear to be slap bang in the middle of what he called I think a fairway any how whatever he called it the geologists are excited. We will either farm it out or sell it off, the full 3D data will become available in the next couple of months.

My take is that whilst it is disappointing that it is taking longer that we all thought there is potentially a whole lot of oil in the ground, we now have more conventional oil than HRZ and that is with only 25% of our acreage 3D there could be more to come. Paul is a far greater loss to the company ref the HRZ than we thought and it is taking time for the new team to get up to spread. Quite rightly in my view there is more effort being put into the conventional at the moment and the HRZ will be put to another larger company to sort out.

That’s my thoughts at any how and all my opinion, if I got any of it wrong others wil