Victoria Oil & Gas: Fundamentals & Valuation Summary

Hi guys,

Literally just in the door from the airport, so havent had a chance to properly sort through notes etc, however I can corroborate everything that hero has said. Re the TCP issue likewise I didnt know what they meant by this however the comments were clear. On 103 there are 550 metres to go as of Christmas day, but two things were slowing them down: firstly the police close the roads including the ice road below -42c this means that the lorries carrying the extra pipe lengths are stuck, but more importantly the detonations relating to TCP are pressure triggered, the high fluid level in the hole was concerning them that if the continued drilling at the same speed they would explode prematurely (their words so sniggers all round)we dont want that as they want to perforate right to the heart of the seam not earlier! So this can happen or has already happen imminently. There ARE hydrocarbons present this was said several times it remains to be seen how much and what ie oil/gas/concentrate. One way or the other we will know soon.

KF had considerable debate around the politics of Gazprom, Shell/ Putin etc and a Russian (London based) asked about the differences in dealing with the politics in A/ Russia (West Med) and Kazakstan (Kermokol)

On the meeting itself, I would have liked a few more vocal shareholders present it was a small group and only a few asked questions, a bit of a missed opportunity as I think we could have got more out of KF if others had been pressing. I didnt get the furthest travelled award this time though as there wasa a PI from Germany specifically for the meeting.

It is obvious that focus and money this year were intentionally taken FROM Kermokol and put into West Mid. Grant Mannheim (deputy chairman) wasnt slow to step into Kfs discussions and make his point and he actually strongly indicated that 105 in particular deserved their fullest attentions and that this was indeed a potential "company maker". I turned this back on them and asked if 105 didnt happen would it be a "breaker" KF stepped in at htis point and talked about not ever wanting all eggs in one basket and touched on two possible acquisitions coming possibly Q1/2 of 07

We were handed a huge wodge of paper when we entered not least dozens of sheets on the state of play at Kermokol this is full of complex seismic /geo data and it will take me a while to plough through it and even then not sure I will understand it but KF refered to this as containing detail of their intent for 2007.

I took a flyer and asked them if they as a board thought that the not inconsiderable cash burn they had got through this year had delivered to expectation or were they now thinking they were a bit behind, as might have been expected I got a robust response in defence of their achievements and expectations to achieve actual production in the shortest possible time. I think it is undeniable that whatever prospects elsewhere they see 105 as the big one, time will tell.

I will leave it at that for now, Iwant to study the reams of documentation and will get back to the bb at some point. There is a lot of it though way to much to attempt to put up here perhaps someone else who was there has a more techy understanding and can enlighten me, but at first glance its a bit beyond me.