Beaufort Securities, page-4

Be interesting to see where support lies for the SP at this juncture. Maybe around the 9-9.5p mark at a guess over
the next few days on a hopeful expectation of a further update perhaps next week. I see it like this ;

1. Let us assume that the 3 operational procedures that were carried out on 77H were successful in returning
the well to where it was at after the First week. ie. Flowed back 40% of the fracc water. Now, it may be that
pressure has dropped off, even with these work-overs. There may be not only more oil but more condensate
as well, with surprisingly lesser gas. Gas would tend to flow easier under the natural pressure of the reservoir.
It would take more pressure to release heavier oil and condensate. So, it maybe necessary to install a jet pump
to increase flow back. Alternately I suppose, the reservoir itself could be losing pressure which would not be a
good sign.

2. So nothing mentioned about a drop off in pressure. {Would an omission of a drop off in pressure if it were
recorded be material?}. So I will assume that there HAS been no drop in pressure since the 3 repairs/procedures.

3. If memory serves, I think that frac fluids recovered tend to decelerate over weeks. So 40% in the 1st week
is normal. If the above down-time on the well had not occurred I would have expected after 3 weeks we would
have recovered another 30 + 20% or close to 90%. We recovered 55%.

4. So, assuming no drop in pressure, no requirement therefore for a jet pump, repairs were successful etc
it should take another 2 weeks from here to announce total clean up. If there is not at least an update in that
time then SP will drift further.

5. Interesting to get those lab results back on the composition of the fluids recovered. My guess it's heavy
with oil and condensate with lesser gas. I'm not sure whether after examining the Cambay Maps we were
in the oil prone area or the gas/condensate corridor. Maybe someone can answer? If we were to recover
mostly oil v gas then I sure as hell hope we are in the gas corridor currently!!!!

6. I tend to be concerned I think with what the last ann omitted, rather than mentioned. Maybe that's just
paranoia on my part. Probably too early particularly if those said repairs took 10 days out of the last 2
weeks in restricted/no flow.

7. If they announce clean up within 2 weeks then I would expect an update on the amount of light oil
recovered to date. I don't think they would go straight to a production test {although this would only take
24-36 hours after clean up to produce a 24 hour flow rate.} If they announce clean up with no updated
results on oil flows I would take this to be a bad sign. If they simply go straight through to a
production test without an ann then we won't know anyway until it's announced to the market.

8. Those lab results should be released before clean up is announced imo. Looking for a sign there.


GLTAH