KEY have managed their money very well. Take a look at the...

KEY have managed their money very well. Take a look at the prospectus, the money raised was to cover the costs of the offer, two wells in the Nyuni block, Suriname, one on-shore well in the Borsano block, expenses related to the off-shore Italy blocks and administration costs.

Two years later and all have occurred except for the drilling of the Borsano block which was estimated to cost KEY around $2m, yet KEY has around $7m in the bank. On top of that they would have had expenses related to the acquisition of the West Songo Songo block and the aborted attempt at the Namibia licence.

The two negatives is that they were unable to obtain additional cash through the options and they have yet to achieve any kind of commercialisation. The options, that was largely out of their hands as they weren't responsible for the global financial crisis.

One thing I am curious about is who was responsible for the drilling of KN#1? From what I've read from KEY and Aminex it seems to me that Aminex wanted to drill elsewhere in the block and it was KEY that pushed for KN#1. Given Aminex's track record with this block that was a great call by KEY.

In terms of future capital and cashflow, Italy has proven to be a slow prospect. Just look at Po Valley (PVE), it has taken them 4 years plus from drilling to commercialisation due to all the government hoops they had to jump through. So Borsano is a long, long, long way away from a positive contribution to cashflow. Nyuni block is looking at being 12 months or so from commercialisation.

What to do? The UK assets look to be a great option, $4m and they are already cashflow positive, add another $3m and they could be producing even more.

Not much hope? I disagree, I see plenty of positives as I am patient.