Connacher Oil & Gas Ltd CLLZF

RE: Cash machine

[bert2]

Sept  29 news

Thus far in the third quarter 2008, Connacher is experiencing strong cash flow from operations before changes in working capital as a result of the significant and growing contribution of its conventional production and its bitumen production at Pod One. The impact of these volume increases in recent months has been reinforced by continuing reductions in related unit operating costs, especially for bitumen production. In August 2008, for example, these unit operating costs were estimated to have been reduced to under $20 per barrel, which were well below levels recorded during the earlier stages of our rampup at Pod One. Further unit operating cost improvements are anticipated as 2008 progresses, as our recent volume rampup will spread associated fixed costs over our larger production base. Unit operating costs for our total production base, including conventional and bitumen production, were estimated to have been even lower at approximately $16.00 per boe in August 2008. These lowering of costs, together with strong second half 2008 selling prices, have provided the basis for much improved wellhead or plant gate netbacks for bitumen and overall production and for resultant corporate cash flow from operations before working capital changes.


62 - 16 =46x 10,000 = $460,000 per day on pod 1  with a bit of down time should yield  $150 mil /yr not counting conventional production

Could be optimistic but I doubt the oil price will stay down for long