due diligence report, page-10

Dex,

From my discussions with the law firm I use in Australia (they have operations in Europe), the message I got was that any group in a position to exercise a pledge in France, needs to notify the company first, then go to the commercial court, get a judge there to assign an expert for a independent valuation of the assets. The judge at the commercial court will then run a bidding process and distribute the cash according the the claims with Transcor having the first right to the cash given its exisiting pledge.Apparently the whole process can take up to 9 months.

Given the high level of interest and the valuation level of gas producing assets and 1P/2P/3P reserves in Western Europe, I would be very surprised if Transcor could get more than Gazonor for its EUR36m, and might not even get more than a large majority stake in Gazonor.

Bartom.