What's It All Mean??, page-8

Sorry about that! Typing in HC on the phone is a pain in the butt!

I just wanted to make a few points:

1. They have told us the CGR is 120 bbl/mmscf. This is the same as 8333 scf/stb if you invert to get a GOR. Volatile oils are generally 3000 scf/stb as a max. This means this is a gas. Unless somehow this well has intersected 2 separate compartments, one being oil and the other gas, which I guess is possible, for a horizontal well. I notice that the field itself has variations in oil and gas properties.

2. Whether its oil or condensate doesn't actually matter anyway - what matters is the properties of the oil/condensate e.g. API, heating value, composition etc. Call it oil or condensate - makes no difference. And we already know the API.

3. Installing bigger tubing, which isn't actually possible on this well, actually won't help. At these low rates its quite possible the larger tubing will actually kill the well, as the well won't be able to lift the liquids.

4. Why do you assume that the minimum commercial rate is 4mmscf/d equivalent, instead of 4 mmscf/d (gas only)? Its really not common for companies to quote gas equivalent rates. Regardless, we really don't have enough data to make any assessments at this early stage. I've tried too - just not possible unfortunately at this stage.

5. Calculating a 100bopd and a 0.8 mmscf/d rate is some good detective work! However, it is very difficult to extrapolate from this as the well is still cleaning up, so its not really possible to determine what the reservoir will really deliver. You really just need to wait until the well cleans up.

Hope the well comes in strong post the coil tubing clean out. Good luck all

OM