Sharky - You posted:

"Let's assume oil can stay above 70 .

How will they get the financing for their next projects and how will this effect the sp?

• suppose they found a partner .How would sp react on that ?

• they found no partner.What options are left ?Another dillution ?If so when they would do that and at what price?Until now they have never said it was their last one .Before Algar they onces stated "no more dillution"However the facts right now are a double share amount.Because we know DG can't wait for expansion he will go for it.
• So if there is a big chance we get another financing deal with extra shares then it's better we were out of the stock before it happens or we are burned again.Any thoughts from other about how you think about their next financing situation.Have they other options left and what would be the best for us.
• A take over from a big investor i could live with if Algar is running next year."

You posed some questions and I have some scenarios which I hope will repond to your questions. I think that you are correct to state flat out that oil has to stay over $70 as a basis for Connacher to survive going forward. My scenarios which will effect Connacher's share price upward going forward are:

• Scenario 1: Connacher retains 100% ownership of POD 1 and Algar, but sells 45% of the 24,000 bbl/d of bitumen production from the expansion (11,000 bbl/d of bitumen) to a partner from China or India. In return, the partner pays off Connacher's $850 million dollar debt and Connacher gets 55% of the cash flow from the expansion going forward in addition to their cash flow from POD1 and Algar. Connacher also retains operatorship of the expansion project. This is similar to the recent Penn West deal. With no debt, Connacher then uses its cashflow to rapidly develop its conventional oil and gas reserves. The share price goes up.
• Scenario 2: Connacher retains 55% ownership of POD1 and Algar, and sells 45% of the 24,000 bbl/d of bitumen production from the expansion (11,000 bbl/dof bitumen) to a partner from China or India. In return, the partner pays off Connacher's $850 million dollar debt and Connacher gets 55% of the cash flow going forward from POD1, Algar and the expansion projects and Connacher retains operatorship of POD1, Algar and the expansion project. There is no debt so presumably the shares go up in price and Connacher can spend its cashflow rapidly developing its conventional oil and gas reserves and develope other SAGD Pods.
• Connacher does one of the two previously mentioned deals, and throws in the Halfway Creek project as well with Connacher retaining part of the project and operatorship of the project, with AOS as a continuing partener with, a Chinese or Indian oil company putting up all of the money to develop Halfway Creek for a percentage of the project. Connacher would then sell its share of Halfway Creek once the SAGD plant is built and in operation to the Chinese or Indian Oil Company which may or may not buy out AOS share during the early stages of the project.
• Connacher retains 100% ownership of POD1 and Algar and drills hundreds of core holes this winter 2010 / 2011 to massively increase its reserves. When the reserve report comes out in the summer of 2011 the share price will go way up in value. With a huge list of new reserves and possible new pods Connacher will then with an increased share price put either 100% of itself up for sale OR do Scenario 1 or Scenario 2. Before Connacher works out any deals with a Chinese or Indian government oil company to pay off its debt for a percentage of whatever projects, Connacher must significantly increase its reserve base. This is the single most important thing that Connacher can do going forward for a minimum cost to Connacher and its shareholders at this point. OPTI and UTS shares currently have a lot higher share price than Connacher due to the greater number of proven and possible reserves that they have found already. So Connacher needs to prove up as much of its reserves as it can going forward.
• Connacher drills up significant new reserves and puts the entire company up for sale.
• Connacher renegotiates its debt with its bankers when the debt comes due starting in 2012. The renegotiated debt is drawn out over 25 to 30 years at a substantially reduced interest rate. The problem with this is that Connacher will still retain this debt and it is questionalbe if the shareprice will increase. In this case, Connacher would have to use its significantly increased cash flow to either buy back its own shares each year and destroy them, or be able to pay down large chunks of its debt each year out of cash flow.

These are just some of the possibilites going forward IMHO for Connacher to reduce or get rid of its current debt to increase shareholder value going forward.

Cheers; Scott