True, there will possibly be more dilution after Algar, but what I think is happening here is that they are trying to get the stock price up BEFORE they have to do that diluation, so it isn't as dilutive. And the best way to do that right now, short of relying on external factors (ie. luck) would be to increase the assets without paying for such assets. So buying assets would be pointless, but drilling can prove up assets at a fraction of the cost of the assets, so it is the most cost effective way out there to increase the asset value of the company without spending an equivalent amount to acquire the assets.

If there IS another dilution for say $100m, would you rather have them issue 100m shares at $1.50 or 150m shares at $1? The net proceeds are the same?

But issuing 150 million shares then by not doing anything dilutes by a total of 150m shares. Issuing 20m now and hopefully getting the price up and then another 100m then only dilutes by 120m total instead of 150m.

Plus, it would make people feel better if the asset value base increases.