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comments from david prentice

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    Yesterday I wrote to DP, expressing my concerns about the recent direction of the share price and disappointment with the failure to meet the stated drilling schedule milestones.

    To his credit, he replied within a few hours, and has given his permission for me to share his response with other interested shareholders on this forum.

    Here is his reply, verbatim and unabridged.

    By the way, Seasons Greetings to all and best wishes for a prosperous New Year.

    Dear.....(name deleted)

    Thank you for your email.

    There appears to be some confusion with regard to what we outlined in our November 24, 2009 release. To be clear, in that release we re-stated our goal of having between 10 and 12 wells drilled at East OK Central by year end. We have drilled 6 and as we announced last week we expect the rig to move in to this area this week to finish off this program (4 to 6 wells).

    At East OK North we have drilled three wells with very encouraging results (remembering that these are the first wells we have drilled in this area, which is approximately 50 miles north of our East OK central wells.

    In addition to this we have also just starting drilling again at West Tulsa (as announced earlier this week) and we expect to continue drilling and completion operations here through the rest of December and into January.

    The field crews at both EOK and West Tulsa will take only minimal time off for Christmas and New Year.

    In addition to all of this we have completed and bedded down the most significant transaction that we have embarked on since we listed (in the East Ok South acquisition). This added approximately 80 wells (approximately 65 drilled, completed and tested and 15 drilled, completed and in production). This deal was transformational for the Company, bringing the EOK discovery into production immediately and giving us an enormous strategic advantage in terms of the future development of the entire 2 million acre discovery.

    I hope you agree that this all represents substantial over performance by the Company.

    Whilst I share your frustration at recent share price movements this is difficult for me to comment on.

    I am however able to comment on the progress we are making in Oklahoma and with the Company generally (as we have already outlined to the market via ASX announcements, our presentation at the AGM and our recent investor road show on the east coast of Australia).

    I'm very pleased with the way things are progressing operationally - we are drilling, completing and testing on all three of our projects in Oklahoma and importantly we have established production and sales at all three projects (Osage, West Tulsa and East Oklahoma). We are very busy and would expect that this activity would lead to increases in production and reserves as our development plans unfold in 2010.

    As always I will continue to promote our Company so that we can attract and retain supportive shareholders and work to ensure that the full value of what we have created in our portfolio of assets is reflected in the share price (although as I'm sure you appreciate this is a challenge sometimes - often because of factors related to the sector or the market generally).

    I hope this is of some assistance.


    David Prentice | Managing Director
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