options, page-5

Well, frankly it's seven months. And the options must be 'in the money' at the beginning of March in order for the conversion to work.

I understand that seismic will be completed by this point in time, and a P1 P2 P3 announcement will be made concerning reserves. If all goes well, the company will also be generating small revenue by utilising extra pipeline capacity by March 2009. But, in this market, you simply can't just tell yourself that 'everything will be OK.' If the above takes place, and the equity market remains in its current condition, then I think the options will miss strike price by a few cents.

If the market deteriorates further, which is possible, then the options will miss strike by a mile.

I also didn't take into account Key's capex in getting KN-1 online, so actually they won't have enough money for KN-2 if the options don't expire 'in the money.' That is, assuming it is offshore and not on SS Island (95% sure it will be offshore).

Looks like capital raising at the IPO price IMO, and onwards and upwards from there.

Advice to traders - you're a goner. If you're holding on in the hope of some kind if magical recovery then you need to get your head out of the sand. This stock is now a medium to long term play only (minimum 6 months) so if you make a living by trading, which IMO is a ridiculous proposition in the first place, then just cut you're losses. There will be no recovery any time soon. That's my opinion, and said so in earnest for the trader's benefit. My heart goes out to traders in this market.

Mudguy.