Ann: Notice of General Meeting/Proxy Form , page-15

The problem has to do with getting from A to B.

Unfotunately for those of you that have been here for only a short time you don't know that there is no direct line from A to B.

It has to go through C,D,E,F and then back to C again.

You are jumping from one point to another without taking into account everything else between.

So they clear $30 a barrel so what. Let's make it $50 a barrel.

It is my understanding that they still need to pay for Phase two of the project in full before they get their hands on any cash from Phase one.

They'll need to get their hands on that $34 million from somewhere.

Ash Creek is meaningless at this point in time and will be for a long, long time and will take a long time to come up to full production let alone recover the costs. It may cover their admin costs once it actually starts producing something.

So let's use some figures. The G project does an amazaing job and clears $50 a barrel to the parties. Elk gets 35% of that $50 a barrel or $17.50 per barrel. Ignore everything else including taxes.

The project will need to produce 2 million barrels at that $50 per barrel just for Elk to get the funds for Phase Two.

At 1000 barrels per day it would take the project 5 years before that would cover the needed funds. At 2000 bopd it would only take 2 1/2 years.

back to reality: it won't clear $50 a barrel and there will be other costs. Now plug in those real world figures and come up with how long it will take for Elk to get those funds.

Then once it does get those funds, then it can start to put some money in the bank.

Put up your detailed figures by month and price per barrel and then you can flame me all you want, but blanket statements don't cut it.