wag time, page-16

I was very concerned the directors were going to dilute us with a large 70m placement near all time lows, but am resting better now they have let the option lapse.

But cash does seem a little tight for both UK wells.
Options to solve this problem are:

1) Flog off Suriname. a 1.75% interest is probably more hassle than it is worth.

2) Conduct an options rights issue with a short expiration date to raise a few hundred k initially. This will not hold the SP back, and if anything if timed correctly with a bullish announcement it can push the SP up to a higher level. It could be tied in with a SPP for extra cash eg 1 share and 1 option for every x shares, but needs to be carefully priced to avoid a large low-priced option overhang. A good time to announce such a plan is in conjunction with a good KN result.

3) a 15% placement to a cornerstone investor. This is acceptable to me, but it needs to be a corporate. Sophs will simply dump for a quick buck and send the SP down into a hole again.

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As for Italy, I would like to see that JV'd for free carry to an Italian Oil company. If we or other 'uitlanders' are the major shareholders we will all be dead before we are allowed to produce any discovery. An italian company needs to drive it.

Cash management needs to be prudent, I am a little concerned about high cash burn at the moment which seems even a little higher than management expected.