Mark, the higher the oil price will allow ATS to spend more per...

Mark, the higher the oil price will allow ATS to spend more per well whilst enabling the well economics to stack up. A good example was when Encana owned the asset each of their wells were costing between $15-$20 mill per well. Each time they encountered a problem they just ploughed ahead because the oil price was $90-$130/barrel therefore the numbers albeit not brilliant still added up. However when the oil price collapsed they found themselves heavily geared and could not see a way of drilling a well at $10mill hence from an economic sense thought best to offload the asset.

ATS bought the speculative assets thinking with the benefit of better technology that resulted in a significant well cost reduction at the likes of the Permian resource that if they could prove the ability to drill at approx $10mill per well at say $60 /barrel environment then presto, they would have a significant large economically assessable resource. They were all about proving the concept and on selling. Unfortunately ATS believed they had the answers and proceeded to spend their $80mill cash holding on what they hoped would be eight wells. Six wells were subsequently drilled some only partially because of the cost of continuing was cost prohibitive.

Unlike Encanna they were not drilling in a $90-$130/B environment. What was the point in ATS continuing to spend $15-$20mill on a single well. That in effect would have proved their concept didn't economically work. So when they encountered issues they up stumps albeit at considerable cost and moved onto the next well. $80mill later the oil price collapsed again with their cash position somewhat worse off. At best they achieved success at three and a half of their six wells.

Their CEO believes after analysing all the data at their access now and with the knowledge gained and lessens learnt during their previous attempts they are convinced they can succeed a second time round. Now the oil price is going in the right direction, but they have no funds to drill. Previous capital raising have seen 1.2 Billion shares on issue now and most major institutions that once supported them have moved on. Some of their senior management that were paramount in making Aurora such a success are very much passive in their involvement nowadays. $30mill would allow them to roll the dice again and maybe sink three wells. This is a relatively small sum in oil terms.The resource is undoubtedly there. Should they manage to drill three consecutive "Stewart" wells with this $30Mill the stock price would take off. I say speculative but worth hanging in there. I would not expect the next quarterly report to say much. Any subsequent announcement of any value would be made independent of the QR I would think. Time will tell. These are my views for what its worth.