Ann: Capital Raising Update , page-21

Lots of questions being raised regarding the timing but nobody has yet had the nerve to join the dots.

I don't want to be too harsh but it strikes me that if there was any really positive news coming that could be shared with the market then this was the time for it. If there was positive news expected soon,, why not hold off the spp for a month or two. As has already been stated the works in the UK don't look like being started in earnest until 2010 so unless there is some other reason the cash is needed now I don't know why this preceeded say a positive announcement on KN1 seismic. Apart from the obvious possibility that the seismic isn't looking too promising. I'd have to guess that they must be hearing some kind of initial info by now.

So one possibility for the timing is that the directors don't believe they have anything positive to announce in the short term. Maybe even the opposite.

There are other possibilities. The one I hope is the correct one is that the directors expected the rights offer would be seen as a very proactive move by holders already rounding up the cash to push up the output in the UK whilst the deal was being finalised. Those that weren't fiscally positioned to take their entitlement were then given the option to sell the rights on to a market that was hoped would also be seeing this as a sign that KEY were pushing ahead very proactively on this acqusition. If this is the case then the directors must have been hugely disappointed by both the take up and the market sentiment.

The tactical error I think they made was not having something up their sleeves to nudge things along if the SPP by itself was not a sufficient catalyst for big interest in shares. Of course this goes back to my first point that there is the strong possibility there's nothing coming up positive enough to ensure a big improvement in sentiment.

As a holder, more than happy to be proven wrong but apart from KN1 seismic results (which if commercialisation is as far off as I suspect is a mute point short term) I don't see where the next big announcement is coming from for at least 3 months. Long term holders will of course not care too much.

Illiquid