To The Inveterate Cheerleaders And Others Who Wish To Avoid Inconvenient Truths:

If we go back approximately a year ago, to the time of the market crash and observe the behavior of Connacher actions, there is something to be learned. In pointing this out, I am being neither positive or negative. Simply, I am observing reaction realities in the behavior of Connacher at that time and since then and then projecting actions taken to potential conclusions and outcomes. In my working life, my area of expertise was Strategic Market Planning of Custom Engineered metallurgical materials. As a Marketing Manager, I interacted on a daily basis with all functions relative to product management and then moving programs and product from development into production and through to the market. Thus, though not an engineer, I dealt with engineering and manufacturing functions on a daily basis. This is said only so that you can better understand my background.

At the time of the market crash last year management of Connacher idled production at Great Divide due to a then current operational loss position. Construction at Algar was also put on hold. This decision increased operational losses due to plant and equipment and labor expenditures which were now non recoverable as there for a protracted period could be no prouctive revenue to offset the costs. This reaction was taken and implemented very quickly. Since that time, we have had a persistent reduction in productive output. Such of course means we have had minimized output and profitability now for an entire year. Even though oil prices have increased with a better than doubling since the bottom. Obviously, any such situation results in decreased revenue, profit and cash flow. My concern with this historical situation is not only that it occured but what it reveals about management. And these actions reveal that Connacher was operating from an undercapitalized position which reveals a defect in contingency planning. Put simply, there was not enough money in the bank to continue field operation. As a result, field productive output was threatened. A threat which we now recognize became a reality.

This to me indicates a major shortcoming in the area of Corporate contingency planning. A shortcoming which in fact likely put the totality of Connacher as an ongoing entity in jeoporady.

Going downstream, have any lessons been learned? Or will we see such additional risky behavior again? Because survival of two near death experiences is unlikely. So, how confident are you that we will not experience a similar incident as we saw last year? What are you aware of that has changed which would preclude such a scenario?

Brian