You nailed it down.
I am still at loss why management is adamant of increasing the ligh toil production. Light oil is worse more and is cheaper to extract, this will help cll fund its operation with cash flow and reduce debt. Even if the market does well, I think cll should relinquish the expansion of the oil sands to 50,000bbl\d in 2015 and instead get the 30,000 from ligh oil. ALternativly they can quicly produce in pdp, increase PDP value to half what it was before the dilition and Argentina , that will give about 100 200m million as we have more shares now, almost double and sell PDP or merge pdp and cll and if prospects look good in PDP keep increasing the value of pdp and then borrow against it and develop the oil sands in 2015 and beyond.
I believe that energy (oil) will be dominant and important for the next 20 years unless we will abandon our life style and go back to stone ages ( aka the end of sSberbia ).
But CLL need to whether the bruatal market weather to rip the benefits of the potential in it resevers, otherwise the resevers are useless, need to find ways to harness them. I am not sure of PDP can survive with the debt and dilution.
PDP did things in reverse. They got so cocky about their initial success, a one tricky pony at that. They should have mitigiate the risk by farming out firsat and then slowing increaing their 100% ownership. They got "hard on" wotj peru. But Peru is very high risk. And when the communist in Argentina seized the oil then PDP was scrwed. Imagine if they have produced in COlombia. I am not saying that they could have predicted the Argentina debacle, but I am illuding to the fact that they started with La Pinta instead of slowing producing from low risk and slowly and surely building production and tacking high risk high reward.
In short they need to increase production with light oil and stop bein obsessed with oil sands, when you are blessed with both.
I think a company can overcome dilution but the double wamy of dilution and debt is dangerous.
Does any one know the potential light oil (note NG in CLL holding)?
Believe
