I have held my shares in SNG since 2002 continuously and have observed a great deal about the organization since then. The following is a quote from Josef Schachter from Schachter Asset Management who has covered SNG the longest (and has also advised SNG in the past) and he stated in his October 17, 2008 report which is available on SNG's Website at http://www.cansup.com/pdf_files/AR-S... in which he states

"If Endeavour is successful the recoverable reserves could reach 4 Tcf. We expect SNG to monetize the Intrepid discoveries with their partner British Gas (BG). SNG is looking at full field development alternatives that could have production commencing mid-2012, netting SNG >225 mmcf/d. Given the current financial difficulties in raising capital we may see SNG sell out or sell down to BG. Monetizing after a successful Endeavour well could bring in cash in excess of $5/share." This was stated 3 months ago. So, in the current market conditions SNG most likely will have to monetize part of all of the Intrepid 5(c)block as it will be virtually impossible for SNG to raise the capital today to develop the block.

At the same time SNG was supposed to start drilling the Mayaro Guayaguayare (MG) Block in Trinidad. Schachter states: "SNG will have the 3D seismic completed late 2008 early 2009 with light oil prospective in the area. Potential reserves from each of three prospects could be in the 10-30 MB range. The exploration and development license commits SNG to drill two wells before June 2010 with the first well to spud Q1/09." So SNG needs to start drilling on this block in Trinidad within the next two months.

In addition, the Schachter report states the following on the Oasis project in Tunisia/Libya: " In late Aug/08 SNG received the Exploration and Production Sharing Agreement (EPSA) for 768K gross acres to commence drilling on an offshore block. The prospect has high impact, conventional, offshore drilling for both oil and natural gas. Nearby fields have proven reserves of hundreds of millions of barrels or multi Tcf’s of gas. The first prospect should be drilled in mid-2009 (subject to rig availability) and the structure appears to have a target >100mb revoverable."

An interesting part of the agreement signed by SNG and Joint Oil : " Joint Exploration, Production, and Petroleum Services Company ("Joint Oil") also signed a "Swap Agreement" awarding an overriding royalty interest and optional participating interest to Joint Oil, in Canadian Superior's "Mariner" Block, offshore, Nova Scotia, Canada. This represents the first such agreement for either Tunisia or Libya. Joint Oil is owned equally by the Tunisian government via Entreprise Tunisienne d'Activites Petrolieres ("ETAP") and the Libyan government via Libya Oil Holdings." So if Joint Oil takes SNG up on this they will partner with SNG on drilling the Mariner 2 well off Nova Scotia. SNG has been trying to find a partner for years to share the drilling costs of the next Mariner Well. In their April 2008 Presentation SNG indicated on a chart that they would start drilling the Mariner 2 well during Q1 of 2009. I have not seen a date mentioned for the Mariner 2 well since then although I remember reading that SNG was trying to locate a rig three or four months ago to drill the next Mariner Well.

As far as how the market will receive the monetization of SNG's Intrepid holdings I have no idea on how the market will take this. I have been continually disappointed by the market over the last couple of months so I don't know.

Cheers; Scott