aegis on arq, page-3

Guys,

Dont you just love the way Banks make the Oil and Gas Borrower take out hedging to cover the Banks Lazy ass and in turn it results in a loss to the borrowing Oiler because the price of oil, condensate or gas went up or the project had a time delay and the contracts had to be rolled or closed out or delivered into with a production from somewhere else.

AWE, Roc and of course ARQ are but a few in a long list that only have there ability to pay back the debt diminished not improved or strengthened by being forced to take out hedging.

Banks should lend on the merits of a project and charge an interest rate that is appropriate to the risk. Then again what do banks know about risk ....... CREDIT CRISIS Pauline H. could do a better Please Explain than most of the banks.

If banks are so worried about the price of a commodity falling at some future date why dont they take out there own hedge contracts (nearly all of then have some form or other of commodity trading or futures and options origination) and the answer is its really hard to pick the price accurately of a commodity so far out and anyway it is quite expensive, we wouldn’t want all those costs now would we.

MI