Ann: Preliminary Update on Full Year Reserves Report, page-2

Reporting on a NYMEX basis will make AOK the canary in the coal mine for ASX US oilers. SEA reported based on SEC pricing in Jan, with everything looking rosy. AT $60/bbl, AOK summarises the problems these companies face:
- reduced reserves and NPV
- reduced EUR on their curves
- pushing reserves down a category (1p to 2P etc )
- coverage implications on the loans

This on top of cash flow implications and reduced revenues.

I think AOK is one of the best placed oilers to weather the storm and expect to buy back in (AOK and/or SEA) once the dust settles. I don't believe the market has priced in these issues for most oilers.

Also glad to see the water issues seem to have been fixed.

Sentiment: Long term buy / short term sell.