TIME TO SET THE RECORD STRAIGHT
Coming out of retirement for 1 post.
Recently a poster presented a hypothesis regarding CLL not being able to pay future debt requirements with 33k of production without major new dilution or debt. The poster then went on to state that any major attempt to increase production to service the debt would in effect destroy the company. MY RESPONSE TO THIS IS TOTAL RUBBISH. Recent updates have shown that lost revenue due to disappointing production levels are being made up by reduced costs at Algar. Also the oil isn't going anywhere so oil not sold yesterday will be sold tomorrow at a potentially higher price.All anyone has to do is ask themselves a simple question. Would institutions continue to accumulate and more importantly, would the banks have given CLL the new revolving credit had they had any of the concerns the poster has?
bbq
YOU'RE CORRECT CLL does in fact have a plan to expand
Press release Mar 10 2009
http://www.connacheroil.com/documents/news2009/CLL-2009-03-10.pdf
Calgary, Alberta – Connacher Oil and Gas Limited ("Connacher" or the "Company", CLL – TSX) announced today that in accordance with a proposed expansion of its Great Divide Pod One and Algar steam assisted gravity drainage ("SAGD") facilities from a combined design capacity of 20,000 bbl/d of bitumen to approximately 44,000 bbl/d of bitumen (the "Great Divide SAGD Expansion Project" or the "Project"), the Company has filed a Proposed Terms of Reference ("Terms of Reference’) for the Project with Alberta Environment. The filing of the Terms of Reference is the first step in the process of submitting an Environmental Impact Assessment ("EIA") for the Great Divide
YOU KNOW, IT NEVER CEASES TO AMAZE ME, that those invested in CLL know so little about the plans of the company. None of it is hidden, it's all there for anyone willing to do a little research to see.. HAS ANYONE seen or heard anything about production increases by building the intended PODS 3-6 ( which if done now would require increased dilution, debt)? OF COURSE NOT BECAUSE AS ANYONE can clearly see, CLL is intending to reach their intended production levels by expanding the already paid for Great divide and Algar projects. This of course is why Algar's design is slightly different as it's being built for 20k production. Great divide will be modified to increase production to 20K. Now of course this shortens the expected lifespan of the projects but it does allow increased production with minimal cost increases. In fact IMHO CLL can easily make the necessary requirements to reach the intended 44k production level with existing funds and WILL NOT require any future debt or dilution. THEN once the desired production levels are met depending on market conditions and the price of oil decisions be made regarding future PODS.
IMHO , future PODS will be added with MINIMAL increased debt or dilution as they'll be paid for by revenues from PODS 1 & 2.The potential production levels could eventually reach 124k bbl/d if future POPS are built for 20k bbl/d as opposed to the original 10k design.
This is a LONG TERM play, do your own research and decide for yourself. Listening to people with SHORT TERM investment plans aren't usually the best sources of information regarding companies building long term projects.
