In 2008 CLL unwound major cross-currency swap on half of their debt automatically exposing the company to Canadian dollar exchange rate.
As a consequence they now translate U.S. dollar debt to Canadian dollars for financial reporting purposes only. This also effects unrealized foreign exchange
gains/losses reported in the earnings. This is the art of the accounting more then actual long debt reduction.
Do not pay to much attention to it because you may arrive with wrong conclusions.
On the other hand discussing this subject has a nice diversion effect from the terrible Q2 numbers.
As a consequence Management reversed their 2010 guidance:
Pod One average production down from 8500bbl/d to 7200bbl/d (15% decrease)
Pod One SOR from 3.2 to 3.5 (9% increase)
Projected Algar SOR guidance has been increase from 3.4 to 3.7 (9% increase)
Bitumen netbacs and EBITDA droped by 15%
Multiple mechanical failures (ESP pumps and instrumentations) becoming the every day reality in this complicated process of extracting the Bitumen. It has been 2.5 years since POD 1 went commercial. So far the ongoing POD1 "improvements" cost more then the POD1 net cash flow, effecting the CLL SP.
It seems that reality is very different then we believed is possible.
