Ken, after reviewing the financials and managements comments, I agree that these results are better than I first thought. One really needs to spend time looking at the financials as a whole, read managements comments and look at the notes to financials. Notes are crucial in understanding what the numbers are showing.

1. They have really done a great job in positioning this company for the next steps of finding a partner for the Upstream operations. Due to the nature of the beast, it is a cash pig, and they say as much in Note 3(b), Liquidity Risk, "Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount of committed credit facilities. Due to the nature of the Upstream segment of the Company, funding is secured by means of indirect participation interests, capital raisings and other financing sources as required. The Company endeavors to manage the liquidity risk by continually reviewing the liquidity position including cash flow forecasts to determine the forecast cash requirements and maintain appropriate liquidity levels. All accounts payable and accrued liabilities are payable within one year. Changes in crude price environment will have impact on our liquidity position due to our working capital requirements." They are being very honest here

2. A review of the balance sheet and notes show better current and quick ratios, better quality receivables (more are current than prior), they have paid down A/P and are more current, they wisely used the secondary offering to pay down debt, the debentures were converted to equity (as required by the rising stock price).

3. The result of all of this is a much reduced debt-to-capital of 12% vs 35% one year ago.

Knowing that they need to raise cash via "equity raising activities, operational cash flows, secured and unsecured borrowings and asset sales", they are well positioned with their present balance sheet. If they are not immediately able to sell of "up to 35% working interest in the Elk/Antelope resources", their balance sheet should easliy allow them to find "secured and unsecured borrowings" to get them through the drilling of the necessary additional wells as required by the IPI agreement. There are certainly risks in acquiring the necessary funding, but they should be able to get it done knowing what their Elk, Ant 1 and Ant 2 DST#1 results indicate.

Morgan Stanley stated "IOC’s business model has matured as interest in the story has waned. We see compelling risk/reward and believe IOC is poised for a major transformation — from a volatile, and often controversial, exploration-focused integrated oil company to a global LNG player with significant exploration upside in Papua New Guinea (PNG)." They have stated that for a very good reason. They see in the June, and I'm sure even more in these Sept numbers, what is going on.

I think the conference call will be very positive tomorrow and shortly they will have things in place.