price sensitive announcement, page-20

I actually dont think much new has come out in this announcement, but that doesnt affect the drilling capability of the GT3000.
I think falchion gave us a better update of the company than the guys being paid $$ to do so. (bit like with politicians, you get a better discussion from them watching a debate on Q & A in one hour on monday night than 3 weeks and $ millions spent on parliament question time.)

Advanced commercial discussions for GT3000 contract - hard to know what advanced really means. Useful information (that possibly they are not able to provide) would be details on what the discussions are contigent upon, e.g. further negotiation on price, the client securing funding, completion of the test hole to demonstrate capability, Coretrack securing additional capital, etc. We could then make judgements on the importance of any of those things.

First commercial job completed - they already announced completion of the job 22nd Dec.

Deep drilling capabilities demonstrated - no more demonstrated than they were before Christmas.

Delivery and installation of well-head scheduled 2-3 weeks - according to the Feb 1 announcement, it was due to arrive in 2-3 weeks (i.e. Feb 14th - Feb 21st), so it should have been both secured AND installed by now. So this has slipped 2-3 weeks over the last 4 weeks. Company shouldn't describe in the announcement they are "pleased" with this. Should say we are "disappointed" with this additional 3 week delay, but the shipment is being delayed because of xyz issue which was out of our control.

CLRS update - given GT3000, am happy to be patient on this one - it does seem there is a very high barrier to entry for technology in this area and perhaps this is a sleeping bear should they get over that barrier, but would be surpised if many investors are relying on it for their CKK short-term/medium term investment decisions.

Consolidation of Coretrack and Globe Drill at new premises - they announced they were looking for a consolidated premises back in 11th Oct announcement. Back then they said they could save up to a $1 million in staffing and rental costs. Todays announcement indicates rental savings of $258K per year. Does this mean up to $742K of staff costs to be saved? Given the employee benefits expense for the last 6 months was $1048k, this would be a massive saving, so think the expected savings are actually less than they earlier anticipated. I don't think the new premises are necessarily a signal for imminent building of new rigs. As far as they have announced, no new rigs will be built until April 2012, unless long-term contracts are in place with the first GT3000 (which may of course happen any day now).

My guess is that this announcement could be the front runner to a capital raising. I think the only investment issue with the company is lack of capital in this interim period before GT3000 starts earning dollars. IMO they need to raise capital ASAP and take that issue off the table - possibly it overhangs the companys commercial negotiations if clients perceive we are desperate for cash. Best to get it before we need it. The longer term benefit should outweigh the short-term dillution, so long as they dont just give it away for nothing to Cygnet and friends.