underwriting facility, page-54

Morning Hercules007


Just to note that before the Civil War most of the Kwanza basin onshore oil producing areas had seismic data compiled. Now from late 2005, when the bidding started, interested companies could buy the seismic data including information on any pre-existing wells on those blocks at varying prices. From memory that data was up to US$300,000+- from Sonangol in the latest bidding round.

The point I’m trying to make is that the Nexoil CityView JV has stated that they had put in an application in 2006 for 2 concessions in the Kwanza basin.

“CityView Corporation Limited has been advised by its co-venturer Nexoil Corporation SARL (“Nexoil”) that the documents for its two onshore oilfield applications have been lodged with Sonangol, the State Oil Company of Angola, and are being processed. The proposed concession areas lie respectively adjacent to the north and south of the Kwanza River in the middle of the Kwanza Basin.”

I would presume that the seismic data and wells (if any) in question would be known to the JV and as such would have been shown to the lenders.

I asked myself who would loan that sort of money without a hell of a lot of concrete evidence pointing to oil and or pre-producing wells in those areas?.

We’re talking US$100 million here. That sort of facility is very hard to get in this current environment.

I bought more CVI this morning.

Thank you very much.

Xan