Charles Lannon PMI Resourses PMI-X DON'T BUY Aug 11, 2011

(Buy a half weighted position now and take advantage of any market malaise in Nov/Dec to go to full position status on any weakness.)

(A Top Pick Sept 25/12. Down 20%.) Involved in 2 high exploration wells. Will be reaching total depth in December. Announced the spudding of the 2^nd well. These are light oil targets and are very large. Have a very large light oil focused land spread in Albania. Also, have conventional natural gas land in France. $55 million in cash on the balance sheet. His target is $0.60. Buy on weakness.

There is not much a technical analyst can value in a penny stock. He does not know the company or the story.

Core focus is in Albania and as well is partnered with Shell in Chile. Shell is paying $25 million for the 1^st well and will then pay $23 million for the 2^nd, which will be drilling in Q2. Also, paying $20 million for seismic. Also, have operations in Australia and France. Have about $50 million in cash on their balance sheet. $0.60 risk target for the next 12 months.

Albania. Well is taking a lot more time and cost than anyone would have liked. Looking forward to what they say in the AGM in the next little while. Be patient. It is speculative. But the pay could be significant.

With Shell as their partner, they are drilling in Albania for a very deep prize. Shell has 75% of the play and will spend $200 million drilling 3 wells and doing seismic. Market Cap is $60 million and they have over $40 million in cash at the end of Q1 so they have $20 million of land value that Shell is willing to spend $200 million on. They think the fields are very similar to some big producing fields in Italy. Once the 1^st well gets out, they will drill the 2^nd well. This is a very big prize. Also, have other assets in France and Australia.

(A Top Pick Dec 5/12. Down 28.13%.) They had a discovery of light oil in Albania but was not very big. There is more drilling going on and Shell has 75% of the play and are putting a lot of money into drilling 2 more wells. Stock is cheap and he thinks it is a Buy.

$60 Million of cash, 8 cents per share. They are drilling deep wells and spending a lot to drill them. Has potentially 100s of millions of barrels of production to come. We should know in July on one well and end of year on another. Buy it on weakness.

They had the discovery where Shell is 70% and this company is a 30% partner. There was a successful well they had drilled in Albania. Very deep and very expensive. Now in the process of sourcing a new rig from China. They are going to bring the rig in some time in Q3 or Q4. The drill time on these wells is very, very long. It takes a year to drill and costs $80-$100 million. The company is well financed. Sitting on $24.6 million of cash in Dec/14, which is 3.5 cents and the stock is at 5.5 cents, so you are paying $.02 for the discovery. The problem is that there is no action going on in the drilling fields in terms of new wealth creation at this time. They also have some great assets in France which they are trying to get some partners on. They also have a long-term potential in northwest Australia. If you have a long-term, 2-3 year time horizon, then he thinks the stock is attractive.

He likes the Albanian play. Had a very big discovery with deep light oil, but the problem was that the spend was getting out of hand. They tried to find partners, but didn’t get the bids they needed. Shell came in with an offer and offered them cash. That cash is now going to be distributed in the next 30-60 days to shareholders. The play that he wanted is now gone. If you own, wait for the dividend and then sell.