Ann: Trading Halt, page-66

I went back and had a look a the whole empire oil bizzo. It is a good story to consider, as it may shed some light on the CR.

Hard to say who was to blame for Empire, but the catalyst for failure was their purchase of the remaining equity from ERM of their common permits for 15Mill. They didn't have the money, so ERM lent them the money with a crazy kicker like the amount repayable was the loan, plus 70% of any share price appreciation. There were common directors and shareholders in ERM and EGO, and Im sure there was a smell somewhere. In comes MIN to save the day two years later (after they failed with AWE). With only a month to go on the loan term, MIN buys the major SH shares in EGO and offers to refinance the $15 Mil. They are showered with rose petals as a cornerstone investor, and it seems everyone is at ease. Needless to say, EGO spent money to make money. The expectation was a roll over of the $15M...When the Red Gully well stopped producing after a shut in, and EGO went to MIN cap in hand for a few extra bucks (they had 4 Mill in the bank, so why did they go to MIN?)...MIN did not waste time and sent them away bow legged. The rest is history. In hindsight, EGO would have been OK (assuming that is what their board really wanted) if they did not borrow the $15M to earn the extra increments. The EGO former CEO is now looking at this from afar, knowing he could have been in the box seat here, but somewhere along the line....and he also learned, if a sardine has lunch with sharks, one day ...

It is a small world, and these guys all know each other and they know what went down and how. So the pattern here is pretty obvious. NWE management is being prudent and conservative. Just like they did the CR right before drilling into the Kingia to make sure they had enough to live if the drill failed...they are doing the same now, to make sure when the cash calls come, they wont be scrounging for sheckels and they will definitely avoid eating lunch at the same table as the shark...they will bring their own lunch.