Ludwig

Be wary of what you read in the articles, the writers have an agenda.High debt, what choices did they have if they wanted to build Algar and other projects and remain a stand alone company? ONLY 2, finance or dilute.. Had they diluted then everyone would be screaming about their shareholder values. Borrow another bunch of people scream..NO WIN..OIL was high finance rate was decent Pod 1 was pushing out around 8k per day so the whole management team ( incuding those fired) and the board decided to finance. Obvipously the banks felt it was a good proposal as they got the money..Nobody knew the market would collapse a few months later..When the market collapsed they still had all the borrowed money in the bank..What do you think they should have done,paid back the debt and eat the penalties? just sit on the cash and hope the investments made could pay off interest or just go ahead and build the damn projects...If you remember oil started coming back up sooner than expected..Now considering these projects take a few years to get built and fully ramped up the decision was made to build it , the only gamble was whether oil prices would recover when production starts and IT DID CLL was right in deciding to build. Unfortunately they were still required to dilute to cover expenses. So they could have not built and used the borrowed money they had to cover expenses and probably would have not had to dilute..However Algar wouldn't have been built as well as the co-generator and other projects and CLL would be in a position of looking for new financing or a JV to build Algar. The debt level we're at now would be the same, there would be half the outstanding shares and production would be about 8k per day.. Would current SP be any diferent? WE'LL never know, but IMHO it was better to build and use the revenue to operate and expand..