"We wouldn't be getting the 90 mill if it was worthless"Not...

"We wouldn't be getting the 90 mill if it was worthless"

Not worthless, but worth less. We are certainly paying a premium for the future potential. Very few organisations will borrow against potential. 700bopd is NOT worth $90mil.

"I remember reading that the current owners are old and have not been bothered as i also believe one is very ill"

Yes, and my car is 1 lady owner, country driven. Its a good deal, not a steal. Or the world would be knocking on their door.

"What is the point of doing a cap raising with more dilution when the SP is sitting @ .004"

Who should management be looking after? Shareholders or option holders? Maybe in some cases they are one and the same.

The point being, you require the sp to grow 7fold for the MHLO scenario.

But a simple raising at 0.4c, with minimal debt can and should return 50% to new investors and existing SHAREHOLDERS. To go from 0.4c to 0.6c wont take much.

"My thoughts are they will need to be borrowing around the 120 mill mark, ramp up production immediately, with all monies generated promised to the investment bank from the word go"

Yes, they have stated a figure of about $120mil for the full 90% including working capital. They also state in the Trinidad anouncement that it will take 36months to ramp up to 3,500bopd.

You would assume it will either be linear or increases more rapidly as time moves on. Snow ball effect.

That being the case, come Aug2011(MHLO expirey) the bopd would not support a market cap for MHLO to be in the money IMO.

New investors want value for money, not doing favours to possible get options in the money.

Company wants to look after themselves, their jobs and shareholders. In that order. Option holders come a distant last.

But as I have shown, a simple discounted cr should reward all that participate.

So IF an MHLO holder was offered shares in the cr, the likely profit would offset the loss from MHLO. Win-win IMO.

Or just let MHLO die, Company is not obliged to help or compensate holders.

Or a 1:1 MHLO to give holders new options with different ex date and ex price.

OBJ/OBJO has just been down that path. It can be structured in many ways to either keep MHLO at 0.1c or to give you a profit.

We will know more tomorrow, but I will be shocked if someone wants to invest in MHL at rock bottom prices and allow MHLO holders to get a better ROI than them.