Ann: RAI - 31 December 2012 Interim Financial Rep, page-38

re: Ann: RAI - 31 December 2012 Interim Finan... strauss,

10 times Earnings (1,600 bopd x $40 x 365 days x 10) = ~$233M.

3-4 times Revenue (1,600 x $80 x 365 days x 3 or 4) = ~$140-186M.

Although technically your way of calculating the value is "more accurate", we would need to place a value on the asset(s) of RAI (producing Cadlao asset) to get the 10x multiplier.

In reality, the assets in these companies never get the full value realised anyway and therefore the 3-4 x Revenue, in my opinion, is a more accurate/(my preferred way) way to value the company.

Either way, both options give us a similar valuation, with the 3-4 x Revenue being a bit more conservative.

3-4 x Revenue Cadlao Valuation ($140-186M / 420M shares)= 33-44c per share.

10x Earnings Cadlao Valuation ($233M / 420M shares) = 55c per share.

Let's then assume that the above calc's are the same as the calc's in Broker/Research Reports, and discount them by 2 thirds, which is where stocks normally get to based on these valuations, and we get an SP of 11-19c, an average of 15c per share, minimum on Cadlao production.

Either way, lots of upside from here just on Cadlao, and then we have the other current projects, new potential project acquisition(s) and cash from the dispute settlement to add...and most importantly Albers as the majority shareholder and controller of the company.