Hi 2v

Much shorter reply this time. Numbers are very boring to most of us.

2007 CLL $0.23 net earnings you refer to include $37.7 mln non cash items which is $0.17/sh ($29.4 mln unrealized foreign exchange gain from old oilsand loan and $8.04 mln of proforma Equity interest in Petrolifera earnings). As you can see $37.7 earnings does not exist .It is reported for the good headlines only. This is why you can not use the net earnings to see how much free cash is available to pay the interest charges.

You must check the resent info about LUKE production .With Q1/2008 1000boe/d tie in ,LUKE 2008 exit production (if all go as plan) will be 3400boe/d(2008 average 3100boe/d). With 2008 $40 mln Capex LUKE will have $10 mln deficit.You maybe confusing a new gas plant capacity (5000boe) with Luke production.

This is what the CLL debt rating agency had to say:

Connacher’s financial policy is aggressive. This largely reflects the use of debt to fund Pod construction costs; potential cash flow strain from cost overruns and scheduling risks as the company proceeds through expansion phases; and absence of meaningful revenues until full production from Pod I.

However, the company has also used equity to fund its 2008 exploration capital commitment .Connacher has hedged some production and is considering hedging more through the use of collars. We expect the company is expected to continue generating negative free cash flows as it proceeds with its Algar expansion project...

JUREK