Bananer.

This next phase will be a major step on the path to commercialization. It will require an investment of several hundred
million dollars for a 30-50 well program to optimize costs on a per well basis and demonstrate commercial recovery
rates. We view the prerequisites to this investment as follows:
• Gathering additional technical data from the pilot horizontal well program;
• Development of a local service sector;
• Passage of new hydrocarbon legislation and social acceptability; and
• General improvement in market conditions.

During the quarter we began to address some of the prerequisites to the next phase of establishing commerciality of the
Utica shale.
This next phase will be a major step on the path to commercialization. It will require an investment of several hundred
million dollars for a 30-50 well program to optimize costs on a per well basis and demonstrate commercial recovery
rates. We view the prerequisites to this investment as follows:
• Gathering additional technical data from the pilot horizontal well program;
• Development of a local service sector;
• Passage of new hydrocarbon legislation and social acceptability; and
• General improvement in market conditions.
Highlights
• Gentilly horizontal well test meets expectations at an initial stabilized rate of 720 Mcf/d from three fracs in the
middle Utica or approximately 240 Mcf/d per frac
• Completion of Fortierville and St. Gertrude horizontals deferred by operator to the first half of 2011
• Concluded pipeline agreement and commenced permitting a 3-D seismic program for the commercial demonstration
project targeting the St. Edouard area
• Cash flow from operations of $1.44 million and production of 649 boe/d with improved operating efficiencies
during the quarter
• Sustained financial position with over $154 million in positive working capital and no debt
---------
This, from Highlights:
Completion of Fortierville and St. Gertrude horizontals deferred by operator to the first half of 2011. No we got no results, but TLM assured that they got permission to drill 6 more wells! Could it be they want to do this in one operation, like Rocco wroto: "A multipad operation", cause they have good or very promissing results from the Fortierville area, that they want to compare or they allready know? What I mean is: they want to be able to make the best target, where to drill, to get the best gas-flow, from this multifrac. It is just a thaught, I'm not an engeneer. Look this next:

We expect the completion of the horizontal wells at St. Gertrude and Fortierville will yield valuable technical information
as we classify the different play types within the deep fairway. This information is essential to locate our demonstration
project, the first step to establishing commerciality. This project will include a multi-well pad and a pipeline to connect
to the GazMetro distribution system. We have initially targeted the St. Edouard area with preliminary work including
a pipeline agreement and permitting for 3-D seismic to identify pad locations.

Also because of higher cost than expected. This sounds good:

To this end, public advocacy has been our top priority over the last six months. We have been actively involved in the
national and provincial media to address the myths about shale gas development perpetrated by US-based political
groups and focus on the facts about our industry. We have held numerous meetings with municipal officials and open
houses with their constituents to communicate the potential economic benefits from an active service sector.
Coincidentally, we are beginning to see local support growing. A new organization, Movement d’Appui au Gaz de
Shale, was established this October with over 300 individuals and service companies that support the development of
the Utica shale. Cégep de Thetford, a college in Québec, is considering introducing oil and gas courses to train Québecers
for the job opportunities that a local service sector would bring.
During the quarter, the Ministry of Sustainable Development, Environment and Parks mandated the Bureau d’audiences
publiques sur l’environnement (BAPE) to propose a framework for shale gas development in Québec. The mandate
was not to determine if shale gas will be developed, but rather how. The public hearings will be drawing to a close
shortly and the BAPE is scheduled to present its recommendations to the Ministry this winter.
We expect the Ministry of Natural Resources to subsequently table new Hydrocarbon legislation this spring. Our
recommendations for this new legislation include a stable, effective and competitive regulatory and fiscal system with
an oil and gas bureau similar to the Oil & Gas Commission in British Columbia or the Energy Resources Conservation
Board in Alberta.

Ok, good weekend and investing. Well, I'll post the Outlook:

Outlook
The investment in light oil production at Antler will increase the value of our assets as a source of development capital
for Québec.
We are looking forward to the completion and testing of St. Gertrude and Fortierville next year and further work on
our commercial demonstration project in the St. Lawrence Lowlands. Despite the delays to the previously announced
timeline, we intend to use this time to lay the groundwork for the next phase. The additional technical information
and new hydrocarbon legislation will give industry the comfort it needs to make the necessary investment in the multiwell
program. A local service sector will follow which increases the likelihood of optimizing well costs. This will move
the Utica out of the pilot phase and, with continued success, to validating the reserve potential of this massive resource.

Good reading.

Expeter