Operations were interrupted by two cyclones as well as by downtime to replace a gas lift compressor. Cyclone season in Australia occurs during the first quarter and as such, we do not anticipate any further major production interruptions and activities will focus on drilling preparations for later this year.

Operational Activities

Production in Australia averaged 6,446 boe/d in the first quarter of 2008 as compared to 7,591 boe/d in the fourth quarter of 2007. Recent production volumes have averaged approximately 7,500 boe/d and should decline from these levels over the balance of 2008, until the new scheduled wells are completed near year-end.