Substantially Undervalued, O&G Situation in play, page-19

The Texas RRC now has the permit for the Tyler County well.

However on further investigation, the well is being located 7km or 4.4 miles away from the LP2 well.

This means it is no longer an "offset" well of LP2. It most likely is targeting a completely different prospect to the one that's been outlined in the Sept 2014 prospectus, 2 presentations & 2 TV interviews, the most recent of which was from 2nd June 2015.

The risk profile of this new well location has to be higher than that previously envisaged or assigned to the old well location, which was meant to be within 1 mile of LP2.

The nearest productive wells to the new location are 2.4 miles away & they only produced from the Austin chalk (8,800ft) or shallower. The best of which produced 2 BCF og gas & @ 15,000 BO which isn't anything to write home about.

Clearly the company have a lot of explaining to do to investors, given that they spent nearly 3 years studying all this play & then at the last minute change the well location significantly.

Personally at this moment in time, I'm not sure what I want to do with my AXT holding.

LOTM