Richard Watkins Affadavit dated May 1st is very enlightening as it reports accurately his play by play of the ongoing negotiations between Challenger and their representatives and CSEI and their representatives. Do yourself a favour and read it : http://relieffromdebt.ca/documents/c...

Item 6: Lists CSEI's indebtedness.

(i) unsecured accounts payable......... US$16,800,000.........CDN$21,000,000

(ii) CWB loan................................... US$28,400,000.........CDN$35,500,000

(iii) Block 5(c) JOA obligations............. US$62,500,000.........CDN$134,625,000

Total Obligations =........................... US$107,700,000......CDN$134,625,000

Item 7: Lists Challenger's indebtedness:

(i) Block 5(c) JOA Obligations.............. US$33,854,706............. .CDN$42,318.383

(ii) Corporate loan...............................US$11,200,000............. CDN$14,000,000

Total Amount owed by

Challenger to CSEI=.......................... US$45,0.54706......... CDN$56,318,383

Item 8: "The Independent Committee recognizes that as is detailed in my Confidential Affidavit, there are assets held by the Corporation that have values, even at the prices available in the current economic situation, that well exceed the aggregate indebtedness of the Corporation of $107,700,000(US)."

Item 18: "As is more fully described in my April 24 Affadavit, ScotiaWaterous continues to take the lead in the sales process with respect to the Corporation's 45 percent interest in Block 5(c) . After a long, internationally promoted marketing process, initial indicative bids were received. On April 22, 2009, firm bids were received. Active negotiations have been ongoing since that time with various bidders, such that matters have progressed to a stage where documentation of a proposed transaction is being addressed."

Item 19: "Upon retaining Jennings Capital as its financial advisor, the Independent Committee instructed Jennings to assist it in reviewing all strategic alternatives for the resolution by the Corporation of its indebtedness and to preserve shareholder value. One of the steps taken in that regard has been the conduct by Jennings of a targeted sales process for the Western Canadian assets of the Corporation."

Item 20: "In that respect Jennings contacted 23 prospective purchasers. Bids were ultimately due on April 28, 2009. Certain bids were received and the Independent Committee has taken advice with respect to them."

Item 21: "On the instructions of the Independent Committee and as part of its commitment to examine all strategic alternatives, Jennings has been in discussions with various capital providers ("Interested Parties") who have shown interest in participating in a recapitalization of the Corporation. Through the course of this process, Jennings has been providing Interested Parties with information on the Corporation and has been more recently communicating a structure where by 45 percent of Block 5(c) is monetized, 25 percent is retained by the Corporation through a merger or other type of arrangement with Challenger, and where the Corporation would raise additional funds in order to be appropriately capitalized on a go forward basis."

This is a very interesting document which brings you totally up to date on where we stand.

Best Wishes; Scott