Connacher has very few ways open to it to fund it's proposed 24,000 bbl/d expansion slated for 2012. We all know this. Short of waiting for it's share price to increase over the next year, and then issuing another 100,000 to 200,000 shares to raise the needed capital, which would most likely wipe out Connacher's share value and any interest in buying Connacher shares in the future, Connacher has realisitcally very few choices available to it to raise the needed capital.

The article which appeared in the Calgary Herald on Sunday September 6, 2010 concerning JACOS' proposed 35,000 bbl/d commercial expansion project at Hangingstone just north of Connacher's Great Divide /Algar Projects (which I have posted in the Off Topic Forum) furnishes the example of how JACOS is coming up with part of the money for their expansion. They have Nexen as a 25% partner in the expansion project. This is shown in the following quote:

"The company [JACOS], now 88 per cent owned by publicly traded JAPEX, which is in turn 34 per cent owned by the Japanese government, applied earlier this year for regulatory approval of a 35,000-bpd commercial project which will be 25 per cent owned by Nexen. The $1-billion project would start production in 2014."

http://www.calgaryherald.com/business/Oilsands+pioneer+JACOS+flash/3486187/story.html?cid=megadrop_story#ixzz0ymvMes7b

Nexen operates the nearby Long Lac Upgrader which currently buys dilbit from JACOS' 10,000 bbl/d pilot project at Hangingstone as well as from Connacher's Great Divide and Algar Projects among others. My point is that like JACOS, Connacher will most likely be forced to take on a partner (logically being NEXEN if they are interested) or someone else. That someone else could be the Canada Pension Plan Board, The Ontario Teacher's Pension Plan Board, OMERS or another large pension fund interested in the annuity like character of Connacher's 30+ years of bitumen reserves. This is the conservative way to raise the needed capital without totally devaluing the share price. The current proposal by Connacher management to come up with the funds is risky at best. Managements plan all along has been to wait until 2014 to renegotiate it's current debt which carries an interest rate of a little over 10%, while at the same time hoping that the bitumen/WTI oil differential stays narrow, and hoping that the price of oil increases over $80.00 a barrel by then. There are many if's here as we all know. There are many comparisons between JACOS' Hangingstone project and Connacher's Great Divide Project in terms of their size, both have 19 well pairs, both are pilot projects, both companies own natural gas production wells to offset part of the costs of the natural gas that they purchase to produce the steam for their SAGD plants, and both sell part of their bitumen production to NEXEN's upgrader. It is my expectation that Connacher management, later, rather than sooner, will realize that taking on a partner to fund its 24,000 bbl/d expansion project is the best way to accomplish this. The question is, will waiting to make the decision raise the benefit to Connacher shareholder's or will management take on a partner as a last resort down the road at which point the shareholders will have to settle for what we can get, as possible venture partners view Connacher as a weakened entity in a desperate position at that time?

Cheers; Scott