Effective deal flow within the industry at large is necessarily
dependent on the establishment of a working relationship between
geologists, engineers, and operators. Like all firms of the sort, S.K.
Oil is dependent upon this dynamic for our ongoing projects; but
unlike many other firms, most of our prospects derive from operators
who have already proven the viability of the sites at their disposal
and who wish to put the development of such sites under our management
and financial structuring. Generally, these operators tend to stay on
with the project as coordinators so that they might continue to
benefit from risks taken previously.

We also routinely take on prospects from those banks which are
understandably anxious to shift their capital into oil and gas in
light of the ongoing crisis in other sectors but which would prefer to
provide loans for projects only on the condition that we can provide
additional equity, a condition that we are able to meet by way of our
strong working relationship with investors who are simarly interested
in shifting their capital into energy.



An additional source of prospects may come from banks that are willing
to loan on a project but require additional equity.  We are able to
bridge the equity gap with investor funds.  This is a form of
Mezzanine Financing that places us in a position to secure equity
positions with the added benefit of lender recourse.