LGX Oil + Gas Inc ROAOF

RE: Development options?

[Bigbadoil]

Good point North sea. I would make the general comment that we are really out of the loop regarding whats going on here, so any statements are pure guesswork right now. I think the NR is typical Art subterfuge!!. Ok we got 23 APi and that is medium gravity oil. its still very valuable. There is a big game going on, so Art is being coy about development options!! Its a strategic move, keeping his cards close to his chest. ARt is looking for the best option. Remember the whole charade about development options at Brenda. It was cleverly touted that they were going to take the pipeline to Donan with Kerr McGee to the north. Infact it was mentioned that Art got on the plane and flew down to Texas to meet the boys.. All a negotiating ploy with CNRL- A company that has a reputation for hardass bargaining. Now Petro-Canada have signed a rig up for a year to do some development drilling at Saxon/Pict(just N of Sheryl). They are going to to do some development drilling and a few EXPLORATION wells. (Never mind they are paying double the rate that Oilexco are paying of their rig!). More Development wells means ultimately more production so those facilities Oilexco are wanting to tie-in too will be getting a little fuller. One thing to watch - i am willing to bet that PC will drill "horizontal production wells" to increase production. Obviously Oilexco's actitivity has woken them up. This is obviously an economic area to play in or PC would not be going about doing this project. If Art has a bigger play then originally envisaged - the new options may mean a stand-alone development. Maybe a FSPO. There was an indication of a gas cap so they have to deal with that too- it would be really not good to flare it. My point is this is a really complex project going forward and we have to be aware of that. The activity by other operators (PC drilling and AEN acquiring the acreage to the South (at Fyne and Dandy)indicates to me that something bigger is going on. In my 20 years+ in the Industry, this activity intuitively tells me that. No-one is scared of 23 API. Hence the vague NR. Remember there is available acreage for this 24th round of licensing around these wells! They are waiting until they get news on that, the we might get more info. Some people are a little premature to write this of on the basis of a vague NR. Bigbadun'