sharky

No challenge from me that oil prices would fix our problem.

But looking at the futures contract, I see a trend that is not reassuring. June 09 which was consistently above $50, is now trading at $47, and as we've approached the expiration of Dec, Jan and Feb contracts we go from the $40s to the $30s.

Increasing production at POD1 at these prices, IMO will not increase cashflow - instead it may use more cash (maybe at best, breakeven).

Also, time is not on our side - by the end of 2009, we'll only be left with 9M in the bank (I believe the 200M will not be accessible). Leaving, at least another year after that (2011), for Algar to be in full production if we find another lender in time.

With respect to the approval process, IMO the process may be less today in Alberta, since there may be less projects applying. But even if we assume it takes 18 months, why do we need to apply for one POD at a time - we may get approval of two or three PODs in the same timeframe (especially now in these difficult times). We could also negotiate with our POD partners to fund these costs upfront.

Using this method, we:

1) secure funding for future PODs,

2) start the approval process as quickly as possible,

3) apply for more PODs at the same time (say 2 more),

4) have Algar up in 2010 producing and earning for us,

5) have two more PODs up by 2011 (using no banks).

6) have more value for CLL overall (holding approved projects).

7) also give a chance for oil prices to hit $65 in 2010, as opposed to needing this price in 2009 (because without it, Algar will be delayed even further).

Time is money, and I see that if we do it all on our own it will take longer and cost us more (even if we can arrange the credit facility).

IMO, Booster