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Meanwhile, our technical work continues to progress. Analysis of our two merged 3D seismic surveys leads us to believe that the area surrounding the Darwin discovery could represent an important sweet spot in the South Falkland basin. Our understanding of the geology of the basin continues to grow but questions remain. Such as: Does Darwin have an oil leg? And: Do the mapped amplitude anomalies close to Darwin represent oil? Ultimately, these questions can only be answered by the drill bit. However, reservoir characterisation studies currently reaching a conclusion will certainly impact our confidence levels. We plan to report to shareholders on the first phase of our prospect evaluation in the area surrounding Darwin in the very near future. 

The Company’s balance sheet remains strong. We have cash reserves of $16 million and a lower overhead than many of our peer group. We will continue to run a strict budget in this current low oil price environment. Most commentators believe that the oil price will make a recovery, as it has done in the past, but perhaps not to the levels seen before the recent drop. Global exploration activity should pick up. We believe the Darwin discovery is too good to remain static, so we are still confident that funding will be found to continue the appraisal programme. 

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## BOARD OF DIRECTORS 

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A Audit Committee 

R Remuneration Committee 

E Executive Director 

