GREY:CLLZF - Post by User
Comment by
rehsifylfon Nov 17, 2010 3:20pm
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Post# 17720217
RE: RE: Entry Point
RE: RE: Entry PointHi Strz,
I took the netback from the Q3 report:
But you are correct in that the cost of dilluent is netted out, so the netback is per bbl of bitumen. My bad. Although $20 last quarter, in the year ago quarter it was $26. $25 is a very conservative number going forward I think.
Concur on the $31M of capital expenditure related to current operations. Remember though the intent was not to show CLL overall, juts to point out that smaller SAGD operations can be commercially viable. For 15000 bbl/day, a SAGD operator should only have half the debt CLL does and at better rates, so $30M of CapeEx would be offset by the higher finance costs. The downstream and conventional oil cash flow was completely left out of the equation - and that is many many millions. Add that in and they should easily have everything covered.
I expect that once the heavy oil production stabilizes above 15K, CLL will get rid of the conventional at a very good number and (hopefully) use the proceeds to pay down debt. Other than very high debt costs (these guys essentially funded Algar using credit cards! good grief), I think this is pretty solid. And the real impact of debt will be to slow down growth, as opposed to threatening long term viability.
Not sure what is up with STP - Sounds like they will get a better financing deal and they are a more pure Oilsands play. I think that although there are many juniors out there with good land prospects, there are not that many that have approved applications, so perhaps people feel they are a good target for a larger company that wants in on the Oilsands.