due for an update, page-2

I'm worried about the cash position too, but as I see it there are a few ways to get enough funds to see us through to production at Grieve (hopefully less than 18 months away).

1. Secure a line of credit from a bank, secured against future Grieve cashflow.

2. Hope for a cash payment from farming out the Niobrara which is considerably more than ELK?s share of drilling a well. If the well is drilled soon and successful the cashfow from that could be sufficient to fund ELK going forward.

3. Sell Hereford, but not likely to fetch much.

4. JV Ash Creek, but not likely until Surtek finishes it's modelling which won't happen until a new well is drilled for a core sample. Current cash flow from T1 & 9 is not likely to be substantial and at best would be lucky to breakeven.
5. Share placement, there's always a possibility of placing around 10m shares at 20c to raise a couple of million, but I think management won't resort to further dilution until every other means is exhausted.

It seems every recent announcement mentions "further opportunities for growth". I interpret this to mean buying other old fields and developing with EOR similar to Grieve. I'm sure there are many small fields that can be bought very cheaply but with ELK's current cash balance I would think we can't look at anything like that for a while. If management is seriously looking at expansion then there must be some cash coming from somewhere.

I would expect a line of credit secured against Grieve would be the most likely. Having DNR as operator would give a lot of assurance to any lender.