Sharon Energy (fka sheyf)

[Bobwins]

I think the Q3 results will be slightly disappointing. The positive things have happened after 9/30/06. The pipeline connection of Jaslan, the comingling of Hound Dog #2. Prior to the comingling, they had to shut down the well so production is going to be light and no new wells were drilled. Because of the price of ngas, the company has delayed drilling and that is going to hurt production in the short run. Longer term, I still like Sharon because of the quality of their prospect locations.

The negative is the depth of the wells requires expensive drill rigs and that has increased expenses while ngas prices have fallen. Not a good combo. Bobwins