Sonoro Energy Ltd (SNV)

[MHT]

My Dissemination of the Corporate Update

First things first, this was not a news release; rather it was a corporate update. We have yet to hear any of the pending news. Most of the present information was already released last November 29th within their MD&A.


Supply Contract
I was expecting to hear some news regarding the Supply Contract between February 15th-23rd. Probably a lot of investors were anticipating the same timeline; hence, the Company had to release an update indicating that they are still working on it. Hopefully they'll get it by next week. The share price should consolidate above $0.40 with the announcement of a Supply Contract.


Debt Financing
Since news regarding the Supply Contract is past due my initial timeline, I will have to revise my timeline for the debt financing: I am now looking towards mid-March. The one concern I have is with the following statement just released:

"The Company anticipates debt financing of all or a significant portion of the processing facility's total cost."

I was anticipating debt financing in the range between $50 and $100 Million. This statement means that they may not even get $30M, and will have to place some of the funds they had just acquired from their latest Private Placements towards the refinery.


Prospective Resource Estimate
I was expecting a NI 51-101 Resource Estimate in April, after they had completed their drilling. I understand that this independent resource assessment was prepared in accordance with the definitions of a NI 51-101, but is this report an actual NI 51-101? Why the need to drill, if there is no need to prove up the resource estimate? As such, I'm guessing that we will see an actual NI 51-101 by sometime in April.


Parameters of Heavy Oil
Please note the following statement:
"The prospective heavy oil resources ((less than)25 degrees API) are expected to be between..."

I had heard that Iraq doesn't set the same parameters on the definition of "heavy oil" as the rest of the world. Is 25 degrees API really considered "heavy"? The rest of the world defines "Heavy" as any oil below 22.3 degrees ( http://en.wikipedia.org/wiki/API_gravity ):

• Light crude oil is defined as having an API gravity higher than 31.1 °API.
• Medium oil is defined as having an API gravity between 22.3 °API and 31.1 °API
• Heavy oil is defined as having an API gravity below 22.3 °API.
• Extra heavy oil is defined with API gravity below 10.0 °API.

Anything above 20 degrees is pipeline-able. If they have exclusive rights for oil up to 25 degrees API, then we are really in business.



Conclusion
Although some people may have taken this Corporate Update as a news release, I am still waiting on the news releases; which should be imminent.



P.S. I have no idea as to the requirements for electrical power, utilities and all other supporting facilities of the project. As for security, I am told that they are in the "green zone", and there are no hostilities in this area.