Company Profile

Churchill Mining PLC (Churchill or the Company) listed on the Alternative Investment Market (AIM) of the London Stock Exchange in April 2005.

Churchill's business plan is to leverage off the rampant growth currently experienced in China and India and in particular its appetite for raw commodities used as feedstock in its burgeoning steel and energy industries.

The execution of this business plan has been instigated with the acquisition of the Sendawar Coal Project in East Kalimantan, Indonesia as well as continued exploration of the South Woodie Woodie manganese project in Western Australia .

More recently, the company has concluded an Exclusivity Agreement with PT Techno Coal Utama in regard to the highly prospective thermal coal project located in the East Kutai Regency of Kalimantan, Indonesia.

Furthermore Churchill's management continues to assess further opportunities in Australia and southern Asia to acquire quality projects in line with the Company's business plan. Churchill is committed to growing shareholder value by become a leading minerals explorer and future miner at a time of accelerating commodities demand.


Recent Minesite article : http://www.churchillmining.com/pdf/2008/23_01_08.pdf


January 2008 Research note : http://www.churchillmining.com/pdf/2008/reserchnote.pdf

Churchill Mining plc
30 January 2008


30 January 2008
AIM:CHL

CHURCHILL MINING PLC
('Churchill' or 'the Company')

Tonnage increased at Churchill's East Kutai Coal Project
Kalimantan- Indonesia



Highlights


Outlined coal tonnage increased to between 135-140 million tonnes


JORC classification work to commence in Feb 2008


Exploration and drilling programme expected to come in under budget


Churchill Research Note now available at
www.churchillmining.com



Following 1800 metres of infill drilling and other technical work in December
2007 - January 2008 at the East Kutai Coal Project ('EKCP'), Churchill confirms
that the Company's internal coal tonnage calculations have exceeded board
expectations at the current stage of the programme.


Internal modeling by the Company's geological team within the first sector of
the initial drilling envelope of the EKCP, has identified an additional 50
million tonnes of coal, bringing the total defined to date up from the 85Mt -
90Mt calculated in December 2007 to between 135-140 Mt of coal.


The updated geological data will be sent to independent coal geological experts
SRK for review and for inclusion in the compilation of an ongoing JORC compliant
Resource Statement, the work for which shall start in February 2008 and continue
throughout the remainder of the year. The first stage of the JORC Statement is
still expected to be completed by the end of Q1 2008. At this point in time the
volume calculations do not form a JORC compliant resource and should not be
considered as such.


The additional tonnages of coal interpreted have resulted from a series of
infill drill holes completed since the last drilling announcement (12 December
2007) that have intercepted the known coal seams closer to the surface in the
west, and added confidence to the position of the southern extensions of the
seams, previously intersected in widely spaced drilling. The seams continue to
the south, with drill holes to date identifying two major coal seams (between
8-14 metres in thickness) together with a number of lesser seams over a strike
length of more than 6 kilometres. The seams also appear to be more gently
dipping in the southern areas tested to date and the next programme of broad
spaced drilling will continue to test at depth the outcropping coal occurrences
in the south.


The consistent lateral extent of the coal seams, coupled with the ease of
correlating the major seams during interpretation, is expected to reduce the
drilling requirements to achieve the exploration targets set for 2008 of
defining 500 million tonnes of JORC compliant coal Resources by the end of 2008,
inclusive of a Mining Reserve of 100 million tonnes.


Paul G. Mazak, Churchill's Managing Director, commented, 'Whilst the
classification of the coal occurrences by SRK will guide the drilling
requirements through the next two quarters, the Company expects that the cost of
the exploration and drilling at EKCP will be under budget due to the
consistency of the coal seams system'.


A Blue Oar Securities research note on Churchill, its projects and the coal
market is available at
www.churchillmining.com



ENDS


In accordance with the AIM Guidelines, Mr Brett Gunter, of PT GMT Services, is
the qualified person that has reviewed the technical information contained in
this release.


Enquiries:


Churchill Mining Plc Blue Oar Securities Parkgreen Communications
Managing Director - Paul G. Mazak Romil Patel Justine Howarth
+61 (0)8 9388 0377 +44(0)20 7448 4000 +44 (0) 20 7851 7480

paul.mazak@churchillmining.com
Olly Cairns
+61 (0)8 6430 1631


Notes to editors


Churchill Mining Plc listed on AIM in April 2005.


South Woodie Woodie


Given the increased prospectivity of South Woodie Woodie, and Churchill's
increasing focus on its Indonesian coal and coal bed methane projects, the
Company sold 80% of the project to Australian company Spitfire Resources Limited
('Spitfire'). Spitfire, which listed on the ASX on the 12th December 2007, will
have the option to purchase the remaining equity in the project after spending
AUD$1.5 million on exploration.


The South Woodie Woodie project covers approximately 490 square kilometres in
the East Pilbara region of Western Australia, and sits approximately 400km
southeast of Port Hedland in the highly prospective Pilbara manganese province.
Churchill has recently completed a heliborne versatile time-domain
electromagnetic geophysics programme and interpretive work, and a follow up
dipole-dipole IP survey which identified multiple drill targets.


Sendawar - CBM


The Sendawar Coal CBM project in Kalimantan, Indonesia, covers more than 800
square kilometres of prospective ground and lies in close proximity to two
operating open-cut coal mines. The project is located approximately 50km from
the Mahakam River.


During Churchill's coal exploration programme, data collected during geophysical
and resitivity work, along with data collected from previous oil and gas
exploration in the area; indicated that the area was highly prospective for Coal
Bed Methane. Churchill (70% of the CBM project) along with its Indonesian
partner RMU (30% of the CBM project) applied for and were granted Indonesia's
first CBM JEA license in September 2007. The CBM project has the potential to
host Gas-in-Place of 5.6 TCF. Churchill is currently conducting further studies
on the CBM project before starting detailed field work.


East Kutai Coal Project


Churchill announced on 15 February 2007 that it had signed an Exclusivity
Agreement with PT Techno Coal Utama to enable it to conduct due diligence work
on the thermal coal project. In May 2007 Churchill announced a sales agreement
had been entered into to purchase a 75% interest in the Project, which has now
been finalised. Exploration and resource drilling continue at the project.


This information is provided by RNS
The company news service from the London Stock Exchange

I am still convinced churchill will turn out to be one of the best performing AIM stocks of 2008, and this new article illustrates why, click HERE

Another JORC is due soon, and once they have proven up enough resopurce, and sorted out the various licences and permits, i would expect a takeover bid to come in, probably from an Indian company.

I would be disappointed if they were taken out for less than 2 personally.

And a bonus could be the CBM at Sendawar studies going on at the moment, news on that project expected anytime

seem's to be going ok !




Churchill Mining says to bring forward production at East Kutai to end-2009
AFX


LONDON (Thomson Financial) - AIM-listed Churchill Mining Plc. said it will bring forward production at the East Kutai coal project in Indonesia by 12 months to end-2009 and added it is in a strong position to raise funds for the construction of the project.

Additional coal off-take agreement negotiations and joint venture discussions with a number of parties are ongoing, Churchill said. The company, however, declined to release further details on projected costs and profits given the commercial sensitivity surrounding the negotiations.

Of Interest:

http://indonesia-oslo.no/Economic-Affairs/Indonesia-Can-Save-Up-To-Rp200-Trillion-In-Coming-Two-Years-VP.html

Searing coal prices cause a frenzy among investors
With coal prices at an all-time high, foreign and local investors alike are clamoring to accumulate coal mines as well as coal-mining stocks.
Bumi Resources is an example of this, having displaced Telkom Indonesia as the biggest company on the Indonesia Stock Exchange (IDX) in terms of market capitalization.

High demand for the stock caused Bumi's share price to jump in excess of 40 percent since the beginning of the year, raising its market value to $17.8 billion (based its closing price on June 24), accounting for nearly 10 percent of the total market capitalization of the IDX.

Aside from the controversial and hotly debated Adaro Energy initial public offering (IPO), there are currently four listed coal miners on the Jakarta Stock Exchange, in aggregate making up 15 percent and 20 percent of the total market capitalization and average daily turnover of the IDX respectively.

If you had invested in all four stocks at the start of the year, today, you would be up an average 45 percent, or a seven fold return compared to if you had put your money in the bank.

That said, it is not a surprise the planned $1.3 billion IPO for Adaro was 6.75 times oversubscribed.

In fact, the Adaro IPO is so hot that Indonesia's mutual fund managers association reportedly stated it asked the capital market regulators to review the planned Adaro IPO as virtually all of it members were prevented from applying for the shares.

They are not alone given that many international institutional investors also claimed they had also been excluded from what will be Indonesia's largest IPO ever.

In the real sector, the coal bonanza is also causing a frenzy among local companies from other sectors, including Astra Group, that wish to invest in the commodity.

To deal with local supplies, state electricity company PLN is currently considering going upstream by purchasing two medium-to-large coal mines from state-owned enterprises by next year.

This is in spite of problems confronting the sector, including a lack of proper ports, which has caused coal shipment delays, burdening companies with extra costs and forcing coal producers and buyers to be more reliant on onshore coal terminals.

Another problem is soaring coal demand. With coal prices up 169 percent in the past 12 months, producers are competing to sell their products on the higher-priced export market.

In 2007, out of 215 million tons of Indonesia's total coal production, 163 million tons, or 76 percent, were sold overseas, leaving just 52 million tons for the domestic market. However, overseas sales could very well be understated on the back of illegal mining operations and coal smuggling.

Compounding the problem is the fact that most local demand is for low-calorific coal, also sought after by Indian and Chinese buyers.

Domestic coal demand is expected to reach 90 million tons by 2010, up 80 percent from current levels. Most of this demand stems from the electricity generation industry, in line with the government's plan for coal to account for 30 percent of Indonesia's total energy mix by the year 2025.

PLN is currently the biggest single coal consumer domestically, consuming around 21 million tons in 2007. This coal usage is expected to triple in the next three years as a part of PLN's crash start program to build 10,000 megawatts of new coal-fired power plants by 2011.

In 2008, to generate electricity, PLN expects to use 24.5 million tons of coal, before further increasing to 43.8 million in 2009 and to 83.5 million tons in 2010.

This expected surge in domestic demand has raised fears among traders that the government may implement export restrictions in an attempt to secure local supplies.

However, government officials we spoke to said such a plan was not in the cards, at least for now. However, it is likely the energy minister will implement his scheme for Indonesian coal producers to pay fewer royalties to the government in return for making coal supplies available domestically.

Thus, even though coal is a leading source of atmosphere-warming greenhouse gases, its usage in Indonesia will continue to rise, as will consumption from rapidly industrializing nations, including India and China.

Amid the current global economic slowdown, high demand for coal, a cheaper alternative to oil, could very well make prices for this commodity almost "too hot to handle".

source: http://old.thejakartapost.com 25 June 2008

Of Interest:

Indonesia's Cilacap Power Plant Shuts on Lack of Coal (Update1)
June 25 (Bloomberg) -- PT Perusahaan Listrik Negara, Indonesia's state utility, said the 600 megawatt Cilacap power plant in central Java stopped operations after coal suppliers halted deliveries of the fuel.
PT Sumber Segara Primadaya, which runs the plant, hasn't received coal from suppliers PT Adaro Indonesia, PT Jorong Barutama Greston and PT Kideco Jaya Agung, said Fahmi Mochtar, president director of Perusahaan Listrik, which owns 49 percent of Sumber Segara.

``The shutdown began yesterday, and it may need three to seven more days to resume operations,'' Mochtar said in a phone interview in Jakarta today. ``Adaro stopped shipments because Sumber Segara has unpaid debt,'' he said, without explaining the halt by Jorong Barutama and Kideco.

The power station provides 3 percent of the electricity supply for Java, Indonesia's most-populous island, and Bali. The plant consumes about 14,000 metric tons of coal every three days, half of which comes from Adaro, the Jakarta Post reported today. The coal companies stopped deliveries because of bad weather, it said, citing a manager at Cilacap.

Sumber Segara ``has outstanding unpaid dues of 240 billion rupiah ($25 million),'' Andre Mamuaya, a director at Adaro, said in a telephone interview today in Jakarta. ``We can't send more fuel as the outstanding amount is becoming a burden for Adaro.''

`Supplies Continue'

Jorong Barutama continues to send coal to Cilacap under the terms of its supply contract, Roslini Onwardi, corporate secretary of Jorong parent PT Indo Tambangraya Megah, said by telephone in Jakarta. Onwardi denied weather had disrupted shipments.

Jorong hasn't responded to a request from Sumber Segara for additional coal to cover the suspended supplies from Adaro, Onwardi said.

Dedy Happy Hardi, Corporate Secretary of PT Indika Energy, which owns 46 percent of Kideco, wasn't immediately available to comment.

Source Bloomberg

Someone is happy with CHL just crossed the 12% level.
http://www.investegate.co.uk/Article.aspx?id=200807040928403298Y

http://www.discussthemarket.com/gkp-chat

Energy demand boosts Indonesian coal mines
Bayan Resources yesterday highlighted the interest investors are taking in Indonesia, the world's largest thermal coal exporter, when it announced plans to raise up to $695m by floating 25 per cent of its shares on the country's stock exchange next month.
With countries including China looking for alternatives to oil, global demand for Indonesia's largely low-grade thermal coal, used mostly in power stations, is surging, helped by the fact that suppliers, including Australia and South Africa, can no longer meet demand.

The price of thermal coal has climbed more than 160 per cent in the last 12 months. Power station coal prices at Australia's Newcastle port, a benchmark for Asia, jumped to a record $172.10 a metric tonne in the week ended June 27.

"Momentum is still very much in favour of coal, ahead of other commodities," says James Bryson of HB Capital Partners in Jakarta.

On the back of the rise in prices and demand Bumi Resources, Indonesia's largest coal miner, has seen its share price climb 922 per cent in the last 18 months.

According to Harry Su of Bahana Securities, Indonesia's big four listed miners now comprise some 15 per cent of the country's stock exchange's $200bn market cap and 20 per cent of its daily turnover.

Analysts said Bayan, a smaller player that produced 4.7m tonnes of coal last year, could draw interest from investors seeking similar returns.

The company has a goal of increasing production to 18m tonnes by 2010.

Dozens of foreign companies have bought stakes in Indonesian mines in the last two years. India's Tata Power, for example, last year paid $1.3bn for stakes in both of Bumi's mines and 10m tonnes of coal. Dozens more companies have started green field projects in the last year.

Indonesia's government is mostly supportive of the expansion.

Simon Sembiring, the director-general at the energy ministry responsible for mining, told the Financial Times it would be "stupid" to reimpose an export tax lifted in 2006 and that there are "no plans to ban or limit exports" provided domestic demand is met.

Indonesia absorbed 52m tonnes - or 24 per cent - of the legally recorded 215m tonnes mined last year.

Demand is expected to remain constant this year and jump to 75m tonnes next year, 90m in 2010 and 220m tonnes in 2025 as new power stations come on stream.

Operators' concerns about domestic prices being much lower than the international market have receded in recent weeks after PLN, the state electricity company, signed contracts to buy coal at $90 a tonne.

Mr Sembiring stresses, however, that foreigners would not be allowed to mine and export at will.

"If we met all the demands from China, India, Japan and Korea, all the coal would be gone in a few years," he says. "It's not just about chasing the money. We have to make sure we still have coal for the next 20 years."

There are, however, very significant impediments to investing securely in Indonesia's coal sector. The last contract of work was signed in 2000 and the world's major players are waiting for a new mining law, which has already been three and a half years in gestation. * Bumi Resources, Indonesia's largest coal miner, increased its takeover offer for Herald Resources, by 1.8 per cent to A$563.5m yesterday to break a stalemate in a six-month battle to control the Australian metals company. The rival Tango consortium, comprising Aneka Tambang, of Indonesia, and Shenzhen Zhongjin Lingnan Nonfemet, of China, said it would meet soon to consider its response. Both bidders hold about 19 per cent of Herald.

Thanks smiler o

9TH JULY, 2008




CHURCHILL MINING PLC

('Churchill' or 'the Company')




DRILLING UPDATE FOR THE EAST KUTAI COAL PROJECT, INDONESIA










Highlights:




Latest drilling and exploration programme defines a coal-bearing sequence up to 16.5 km along strike




Initial 250Mt JORC compliant resource reported previously covers less than 6kms of the potential 16.5km strike length



Further promising indications of coal resource quality with very low sulphur and low ash content




Drilling completed to date covers 3,489 hectares and represents less than 10% of total coal target area




Infill drilling programme at the potential first mine pit has commenced to advance the operation into production stage




Second pit drilling target being identified







Churchill Mining (AIM:CHL) is pleased to announce an update on its ongoing drilling programme at the East Kutai Coal Project in Indonesia.




The drilling so far has defined a coal-bearing sequence of approximately 11.5 kilometres along strike from the north-northwest to the south-southeast of the property covering approximately 3,489 hectares of the first target block (RTM), concession area, which represents the area of less than 10% of the four main coal target tenements.




A further 5 kilometres of strike potential of the present coal seams are indicated by the geological mapping and will be tested before the concession boundary is reached. Additional outcrops have been mapped within the RTP concession area to the south of the RTM concession area.




Ongoing drilling to the south of RTM, continues to outline areas of thick coal seams with recent individual intercepts of up to 25m with additional coal outcrops in a new promising area with the potential to host Churchill's second mine pit . A number of previous holes in the same area have intercepted this seam, with coal intercepts ranging between 18-21m.




Mapping to date has successfully located 304 coal outcrops. Depending upon their location in the structure, the coal seams range in dip from a relatively flat 2 to 10 degrees. The area chosen for initial JORC compliant drilling is defined by coal seams dipping up to a gentle 10 degrees and generally striking north-northwest to south-southeast from the western areas of the RP block extending southwards for 16.5 kilometres through the RTM concession and into the RTP concession (June 08 Drilling Update Map - http://www.rns-pdf.londonstockexchange.com/rns/6276Y_-2008-7-8.pdf). However, the initial 250 Mt JORC coal resource centres only on less than 6 kms along strike.




A major regional anticline, trending north-northwest and located immediately east of the current exploration area, is the main structural element in the area and the coal-bearing sediments are located on the western flank of this anticline formed within a gentle syncline structure that is occasionally warped.




The coal in the area is described as sub-bituminous with a very low sulphur content (<0.20%) and ash generally less than 5%. This type of coal is ideally suited to the new generation of power stations being built in rapidly developing economies such as India and China..




The coal that Churchill is expected to produce is now also finding strong demand in other markets, including Europe, where the low sulphur coals are being sought after for its lower environmental impact, suggesting growing demand for this type of coal in the future.




Drilling to date has totaled 12,970m, comprising 5,234m of open hole drilling and 7,735m of coring in 87 drill holes. All drill holes are drilled vertical and depths range between 24m-164m.




At present state, drilling remains reasonably wide-spaced at between 400-500m in most areas, with infill drilling starting in the first mine pit target.




Infill drilling is also being conducted in areas where the company is expanding the measured resource category by additional topographic surveys and selected infill drilling programme.




The company currently has three drill rigs on site with a fourth rig to be shortly deployed to increase the rate of the current exploration programme. The drill holes are geophysically logged at completion of the drilling to ensure the intercepts of coal are of acceptable recovery for the inclusion in the resource model. Analyses of the coal are completed at the Intertek Laboratory in Samarinda, an internationally accredited laboratory.




Churchill's Managing Director, Paul G Mazak, commented:




'The latest round of drilling has added to the potential of the coal deposits within the East Kutai Coal Project concession areas. The discovery of a coal seam of up to 25 metres in thickness stretching over 11.5 kilometres along strike, demonstrates the scale of the coal deposits within the concession area. There is a further resource upside of up to 6 kilometres strike length to drill within the RTM tenement and we are only just about to commence detailed drilling on the newly acquired western blocks.'




Churchill's EKCP retains SMG Consultants to model and analyse drilling and exploration data and further resource updates are expected during Q3/08.

Good bit of news smiler o,, its nice of the company to give us regular updates

Yes and in such a torid market !!

Also

July 9 2008



Churchill Mining says coal-bearing sequence up to 16.5 km defined at East Kutai
LONDON (Thomson Financial) - Churchill Mining Plc. said its ongoing drilling programme at the East Kutai Coal Project in Indonesia has defined a coal-bearing

sequence of up to 16.5 kilometres along strike.

The company said a coal-bearing sequence of about 11.5 kilometres along strike from the north-northwest to the south-southeast of the property covers around 3,489 hectares of the first target block (RTM), concession area, which represents the area of less than 10 percent of the four main coal target tenements.

A further 5 kilometres of strike potential of the present coal seams are indicated by the geological mapping and will be tested before the concession boundary is reached, it added.

Churchill Mining said it currently has three drill rigs on site with a fourth rig to be shortly deployed to increase the rate of the current exploration programme.

TFN.newsdesk@thomson.com tsm/slm

The way the company keeps moving forward with the drilling etc makes me think they will have no trouble selling the coal and may even to get an agreement before the start of production

Am looking at 1 or 2 years before we begin to feel the full benefit of this share

of Interest:

COAL NEWS: LATEST HEADLINES
12 July 2008 01:35 PM London Time




Indonesia May Set Domestic Coal Supply Obligations (Update1)
July 11 (Bloomberg) -- Indonesia, the world's biggest exporter of thermal coal, may enact a rule later this year requiring mining companies to set aside part of their output for domestic power plants, Vice President Jusuf Kalla said.
``We don't want to have blackouts, and on the other hand, we export coal,'' Kalla said in an interview in Jakarta. ``We shall be improving domestic obligations'' of coal producers.

The nation, which generates almost half of its electricity from coal, will need an additional 32 million metric tons of the fuel annually by 2010, when 41 percent of new capacity comes on- stream. Fuel consumption may rise further as more generators are added, Kalla said yesterday.

``We're not saying there will be a limit on exports, but we have to secure domestic supply,'' Jeffrey Mulyono, chairman of the Indonesian Coal Mining Association, said by telephone. ``We have no other choice but to have a regulation.''

The government may also seek royalties from mining companies in kind, and sell some of the fuel to state utility PT Perusahaan Listrik Negara below market prices, Simon Sembiring, director general of coal and geothermal resources at the Ministry of Energy, said in a separate interview. He declined to say if exports would be affected.

Indonesia will enforce a provision in the mining contracts of the country's biggest producers, including the units of PT Bumi Resources and PT Adaro Energy, forbidding them from charging domestic customers more than their lowest export price, Sembiring said on June 28.

Power Outages

Power outages are frequent in Java, the world's most populous island, because of a lack of funds to build plants and upgrade the nation's aging network to keep pace with demand. The government will require some factories to shift 10 percent of their operations to the weekend, when there's spare generation capacity, Kalla told reporters today.

Factories in Java and Bali would need to start weekend operations from July 21, said Industry Minister Fahmi Idris. Companies that don't comply will have their power supply cut temporarily, he told reporters.

The rule may be eased after December 2009, after some units of the new coal-fired plants become operational, said Fahmi Mochtar, president director of the utility.

The government ordered Listrik Negara two years ago to boost generation capacity by 10,000 megawatts to about 34,000 megawatts by 2010. Next year, the government will start construction of another 10,000 megawatts of capacity, a third of which will use coal.

Coal Production

``The rule that the energy ministry is preparing may also say in which months all sectors must submit their coal requirement,'' Sembiring said yesterday. `We have to know first the domestic demand. There are many kinds of coal, so we must know this first, and then we try to secure supply.''

The Indonesian Coal Mining Association forecasts production may increase 9 percent to 235 million tons in 2008. Mining companies may export 180 million tons this year to benefit from record global prices, according to the association said.

Thermal-coal prices at Australia's Newcastle port, a benchmark for Asia, rose 13 percent to an all-time high for a sixth week. Prices climbed to $194.79 a ton in the week ended July 4, according to the globalCOAL NEWC Index.

Record overseas prices led local producer PT Tambang Batubara Bukit Asam to increase the price it charges Listrik Negara, its biggest customer, three times this year. The current price is 90 percent higher than in 2007, Bukit Asam said.

Bumi Resources, Indonesia's biggest coal producer, fell 2.2 percent to close at 6,650 rupiah, while Bukit Asam dropped 1 percent to 14,600 rupiah.

source: Bloomberg 11 July 2008

Smiler,

CHL already have an off take agreement to supply around 10% of production to a local power station, which ,may be increased by the Indonesians with CHL's blessing, as the plant is local to the proposed mine, and therefore a saving on transport costs.

I believe up to 15% of production will go to the power plant.

Looks like coal is back in vogue?
http://www.bloomberg.com/apps/news?pid=20601087&sid=aF7J5DuEkRTU&refer=home
WTN up $1 in Canadian.
cyril

News! 33 metre seam discovered!

Click HERE

A nice tick up late in the day, with news due anyday, perhaps a leak?
cyril

">

RELEASE SCHEDULE OF JORC UPDATE

Churchill Mining (AIM:CHL) wishes to advise of a delay to the release of the next JORC resource update from the Company that was due this week.

The delay is due to the heavy workload of the independent coal experts preparing the report. The resource update is now expected to be released by the end of next week and will be followed by an update regarding the Feasibility Study Programme.

Seems positive mentioning a Feasablity study?

First Glance Update Post Analysts’ Visit Price target: 350p

Oil & Gas 8 May 2012

Full Value Dependent on Kurdistan's access to Export Revenues

There is little doubt that GKP's Shaikan is a world class asset, which we believe
will provide further upgrades to the Company's net reserves, as will the other
discoveries such as Sheik Ali that have excellent potential. Add to this the fact
that security fears have been overdone, and that the region is largely trouble
free, the outstanding issues relate to access to exports, or more specifically,
export revenues. We believe that the risks are limited to timing, and that our
target price of 350p (upgraded following this visit) is an adequate reflection
of these risks. Consequently, we are reiterating our BUY recommendation.
• Reserves upgrades will be the short-term catalyst: Recent well tests have resulted in
a greater understanding of the Shaikan asset. Firstly, the recent news from Shaikan-6,
which was designed to test the how far Shaikan extends to the south, failed to intersect
the oil water contact in the main Jurassic horizons. Management believes that the field
extends for up to 5km further downdip, which will substantially increase reserves.
Second, following flow tests and pressure studies, there is a belief that the Jurassic
horizons are contiguous with that observed in the Kand-1 well 40km to the south, which
was found to be water wet with excellent pressure support, providing for a natural water
drive mechanism; a revised CPR will be released in June or July.
• Production ramp-up will be achieved; it’s all about the timing: GKP is currently
producing ~6m bpd from its current facilities, which is sold domestically for $50/bbl. The
commissioning of EWT-1 will step up production to 20m bpd by Q3’12, while a further
upgrade to 60m bpd could be achieved by 2Q’13 via the commissioning of EWT-2
(1Q’12), and EWT-3 (2Q’12); trucking (the current field export method) can cope with up
to 70m bpd as ably demonstrated by Genel on Tak-Tak. We believe that the
management will be able to achieve these plans, with influences external to the
Company the only barrier to delivering on this timing. However, given our observations,
the support shown by all levels in Kursistan for this development, from the
Governmental to local, we believe that management's timeline is achievable.
• Operational team fit for purpose: What this trip highlighted is the distance that the
Company has travelled in a relatively short time. With a growing “in-country” operations
team, the focus is still very much on cost containment and the staged development
approach maximises the cash flow from operations while counter balancing it with
appropriate risk management. In this respect, the Company continues to impress, and
this ethos is reflected at all levels, which becomes apparent with the close inspection
that this visit has afforded.
• Full value to be unlocked by Kurdistan's Access to its Export Revenues: Currently,
Kurdistan and Baghdad are locked in a battle for Kuristan's share of the export
revenues. Until such times as Kurdistan achieves access to the export revenues accruing
to it from its production, GKP's production will be limited to revenues generated by
sales into the domestic market. We estimate that the domestic market amounts to
between 175 - 200m bpd, and would not support the full development scenarios of all
of the fields currently discovered and appraised. Consequently, the Company will not
derive the full value of its assets until such times as there is an effective route to market.
• A Target Price of 350p a Fair Reflection of the Risks: Following this visit, we are have
adjusted our target price to 350p, which we believe is a better reflection of the risks
associated with the portfolio. Further upgrades cannot be ruled out, and as a result, we
are reiterating our BUY recommendation. We have condensed a lot of information into
this note, but we will be providing a more in-depth note on GKP, incorporating all of the
thinking behind today's update as well as following the release of the Company's CPR.
cyril