According to Connacher’s reporting, Pod 1 and Algar are producing about 14000 barrels a day of bitumen with a netback for 2010 of $23.68 a barrel. This gives a cash value of $9,945,600 per month. If I calculate the net present value of this cash per month at 6% over 25 years, the estimated life of the wells, I get a value of $1,543,625,386.67. If I then subtract the approx. $880,000,000 in debt and divide by the 448 million shares outstanding, I get a present value of $1.48 per share!
This is just the value of the current Pod1 and Algar operation. The value doesn’t take into account a profitable refinery, their light oil and gas operations, or substantial additional reserves.
Connacher calculates on slide 21 of their August presentation that their net asset value is $6.67 per share.
Connacher is currently selling for only .56 per share. In my opinion, it ought to be a prime target for a takeover.
Martin
