spud date top secret, page-5

Hi again Speccy

This, as you know is a bit of a punt for me, based mostly on the Ungani nearology and the JV participants.

I think they will need to raise capital in the New Year, whether it comes off or not, barring a spectacular farmout deal. It's just a matter of the price we have to pay in dilution, which of course is inversely correlated to the prevailing share price at the time of said CR.

When you get a gusher, it's hard to say no to the institutions, and sophisticated sorts, who are climbing over themselves to give you money as long as it's at a 5 or 10% discount to the prevailing. So CR is probably a given in this circumstance. SPP? Hmmm, probably not. Can't remember a time when that has happened in such circumstance.

Just to extend the tangent, usually when a company rewards the loyal shareholders it's because the sophies and instos are not knocking their door down, or because they've given so many discounted CRs to these guys that one more would seriously damage the little credibility they have left. I'm not saying Key fits into this scenario, they are probably good guys and great operators, just like big brother.

Having said all that, I'm probably going to wait to see how it turns out and then reassess, maybe 2 weeks or a month. By that time, or shortly thereafter, there might be a new operator, so this would probably figure in my thinking too.

Sorry to be a bit negative Keyers. Of course, I think there is a reasonable chance of success on this well, otherwise I wouldn't be here. I'm always a bit down on listed companies at this time of year because that's when most of the dilution to my shareholding occurs as managements exercise their, in my opinion, incorrectly valued options, not to mention increase their allocation of options to be exercised in subsequent years. It never ends.