bentara development approved, page-5

Auto,

Thanks for the reply and clarification repayment of debt and recovery of costs.

I have to admit I am still a bit bamboozled on what ROC sees in these RSC's.

OK they recovery their costs, some upfront now on substantiation and some on Bentara over the period to the end of 2015. However, ROC wrote off $6.9M relating to its share of interest which is not reimbursable. Presumably, that makes about $14M in interest not reimbursable by BCP up until 2013. With the $162M loan not been paid off until the end of 2014 that will probably add another $10M in interest in 2014 to the $14M. Then there is the opportunity cost of the estimated $150 capital the partners have put in to BCP.

Consequently, BCP has to make at least $24M in fees and bonuses on Bentara before they even breakeven on interest expense alone. I just cannot at the moment see where the profit and return to shareholders is on the current RSC arrangement. Perhaps once debt has been repaid, they will use Bentara cash flow to fund further expansion with the real profits been in this expansion and in its ongoing long term production profile. A bit more transparency on this by ROC would be welcome.

I agree ROC is significantly undervalued. I suspect as BCP debt of $162M is paid down over the next 9 months we should see a rise in ROC's share price.

Regards

SP