After quite some time I am saddened by the state of affairs on our investment. There seems to be some discontent among members of the board on the continuity of Falcon. On one hand, theknight with a practical insight believes the propspects are bleak to non-existent while on the other hand Lanman with a theoretical analysis supports the view that all is not done yet. Key issue being whether Exxon is leaving the whole project.

For sure frac3 did not go down well otherse we would already have had a press release. Exxon has not said a word yet but may do so next week. I believe lanman's views are correct but has discounted the fact that Falcon may have mishandled the relationship. If Exxon pull out it will not be because they do not beleive in Mako and its potential, it is more because of Falcon's management. We do have a white knight in the form of MOL which we should not forget but whatever influence they can have to convince Exxon to stay will be at the detriment of Falcon.

Any propective new partners will be discouraged to associate themselves with Falcon despite our remarkable data room. Despite the relative strenth and resilience of the markets this year, one should not believe that the capital markets are thriving. Deals are only being made under more stringent terms and strong fundamnetals. Gone are the days of easy financing.

There is no golden rule, but to have a partner providing any financing one will consider :

1. Strong fundamentals in the business. (Falcon has the Mako and Australian projects with massive reserves but no real propects on it being economical.)

2. A business generating profitable returns ( Falcon has zero productivity)

3. A sound management team. (Falcon does not seem to have a cohesive and strong management - it seems there is too much Bruner influence which is perceived as negative)

We are weak on this front and I am not very optimistic and it seems we have gone to the dark days of 2007. Nevertheless I will hold my shares because as I said before from 0.18 to 0.10 there is not much to save when one considers the big picture.

Good luck to all in whatever decision you make but it will be tough.