Connacher already has a preliminary shared Pod arrangement with Alberta Oilsands (AOS) at Hanningstone where the two of them have combined their bitumen lands together and done some exploration bore holes to date to determine the extent of the bitumen formation. It however remains to be seen whether this will go anywhere in the future as AOS's shares are valued at 12.5 cents a share. AOS is not a wealthy company. All that they bring to the table for Connacher at present is a piece of land ajoining Connacher's Hanningstone land permits.

I don't know how a Pod Sharing arrangement would work that would be in Connacher's best interest. What does the other party need to bring to the tabke to be a 50% partner in a POD? Connacher already brings to the table the land to build the POD on. In addition, Connacher also if we were talking about Algar for instance also will bring 100 % of the natural gas production as a hedge (which needs to be sold to cover the cost of the natural gas that they buy locally for Algar). Connacher also brings the MRCI refinery to the table as well as a source of diluent when it is expanded to be a hedge for Algar's production. Connacher also provides the experience in constructing the facilities at the POD and operating the POD long term and training the POD workers. My point is that Connacher is already providing more that a 50/50 partner can provide at present in terms of them just contributing money.

Now I could see a POD sharing arrangement that would work but there are a lot of ifs here. IF.........somebody like OPTI were to become a POD buddy and provide access to an upgrader that they own nearby to proccess the bitumen from all of Connacher's other POD's at as well as contribute their share of the money to building a POD. Encana worked out an arrangement with Conoco/Phillips whereby Conoco/Philips refineries are being retrofitted to hand dilbit and Encana is contributing the SAGD Project and bitumen as their share of the deal..

Another possibility would be to take on a partner like the Ontario Teacher's Pension Plan as a partner. They are looking for long term investments to provide profits for their pension plan decades from now and they have a lot of capital to invest in future production. SAGD plants in the Oilsands are capital intensive. They require a tremendous amount of money which the Ontario Teacher's Pension Plan has and partnering on a POD or two would in Mr. Guesella's tesms provide an anuity for both The Teachers Pension Plan and Connacher in the future. In fact an arrangement with the Teacher's Pension Plan might be worked out where they are guaranteed a steady return on their investment over the 25 years life of the POD in question and Connacher would continue to own all of the equity in the POD and operate it.

There are as you can see possibilities for POD buddies but the question is what can a POD buddy do for Connacher? Connacher must be in the driver's seat in any deal on a future POD. Personally I do not think that it will come to this. I'm taking a positive approach that the price of oil will be where we want it by this summer, September at the latest and that Connacher can continue going it alone. How is JACOS handling the present situation. You don't hear anything from them during this time. They must be in an similar situation to Connacher. I wonder what they are doing?

Cheers; Scott