Hi Esch;

Thank you for your response to my original posting. It has taken me awhile to find Connacher's original posting concerning Connacher's acquiring the MRC refinery. The first mention of Connacher buying the MRC refinery was in the press release by Connacher's management dated December 2, 2005. The context of this letter was that Connacher was negotiating with a bank to secure a bridge loan to purchase the refinery as well as secure Connacher's original US $199 million dollar loan to build POD 1. In the following letter Connacher management states that the refinery in additon to Connacher's other assets may be required to act as collateral for the loan: "Connacher may be required to grant a security interest in some or all of its assets, including its rights in the Great Divide oil sands project and the refining assets which it proposes to acquire."

It is also mentioned in the press release that the bank would provide money to Connacher management to acquire the cash generating refining assets which was the second reason I expect for securing the loan as reading between the lines the bank would look favourably on Connacher management having a cash generating source of income to contribute to partially funding its general operations while the Great Divide project was under construction. I interpreted the following quote to mean this:

"In conjunction with the proposed purchase and in anticipation of securing regulatory approval to proceed with the development of Pod One at Great Divide, Connacher has also executed a mandate letter with a major international bank to engage such bank as exclusive arranger, underwriter and administrative agent in connection with Connacher’s proposed purchase of refining assets and the development of its Great Divide oil sands project. While the mandate letter does not constitute a commitment or agreement to enter into a commitment to lend funds to Connacher, it does set forth services to be provided by the bank to assist Connacher in securing a bridge loan to acquire the cash-generating refining assets and then to assist in raising term debt to repay the bridge loan for the refining assets and to provide the development capital for Pod One at Great Divide. The contemplated amount to be raised is up to US $199 million, including the bridge loan and a term loan facility of up to US $148 million. A portion of the term facility would be used to repay the bridge loan for the proposed purchase of refining assets. The balance would be utilized to complete the company’s anticipated capital program to develop Pod One at Great Divide. In combination with the company’s current cash balances, this should be substantially sufficient to fund the presently-budgeted costs of drilling the initial fifteen SAGD well pairs and to construct the facilities which constitute the 10,000 bbl/d project. As the mandate letter is not a formal commitment to finance, there can be no assurance that such financing will be available on terms acceptable to Connacher. To the extent that such financing is available, Connacher may be required to grant a security interest in some or all of its assets, including its rights in the Great Divide oil sands project and the refining assets which it proposes to acquire."

So when I originally posted "MRC was purchased originally as the bankers wanted Connacher to have it in order to loan Connacher ..." I did not mean to say that the banks ordered Connacher to purchase the MRC refinery to secure the loan. As you and Jurek have pointed, out the bank could not do that. But it could ask for collateral as well as helping Connacher secure the refinery as a capital generating machine to contribute to repaying the bank loan over time. I just want to clear this up as it was not my intention to mislead anyone. If I recall correctly Mustang Capital Partners, which acted as an advisor to Connacher management at the time brought the idea to Connacher management when it learned that the MRC refinery was for sale and from these discussions with Mustang Capital Partners, Connacher management decided the refinery pruchase was a good idea for the two reasons that I mentioned. The bank did not tell Connacher to buy the refinery. It was Connacher's decision and the bank went along with it. I am sorry if my original statement gave anyone the wrong impression and I hope that this clears up any wrong impression that anyone got from my original statement. Of course you are all free to state that this has turned out to be a bad decision by Connacher management. Personally I think that it was still a good decision.......time will tell.

Best Wishes. Scott