Connacher Oil & Gas Ltd CLLZF

March Production

[moric]

Afterhearing February's production number I am very curious to see what theyproduced in March. In the news release CLL mentioned that production was stillchoked for the first week of Feb, seeing how Feb is a short month I wouldexpect a pretty significant impact on the average daily production for themonth. The next big milestone for CLL is a 15,000 bbl/d average for a monthfrom their Pod one and Algar.
 
For all those followingthe stock here are some other interesting points to watch for.
 
1) CLL / AOS JointVenture land. What is happening with this land? There were rumors that ATHwould purchase the land from. This rumor can be slightly validated by ATH'slands that surround the JV lands. Another validating point wasbrought up that ATH has built an engineering report to build a pod right on theborder of the ATH and JV lands.
 
 Thoughts : If thisland is bought it would be quite the unexpected win for CLL. If however thistransaction never occurs, I doubt the share price will be negatively impacted.I believe this because I don't think the market has valued this in to thestock, as CLL is the type of stock that doesn't have much investor faith due toweak management decisions in the past.
 
2) Debt Restructuring.Can CLL manage to refinance their debt at a lower rate?
 
 Thoughts: Therehas been a little bit of talk in the street that suggests that they are outlooking, nothing solid to prove that they will be able to achieve this. Withthis said, there is huge potential for CLL to create value by refinancing.
 
3) Pekisko Drilling.
 
  Thoughts:How economic will this play be for the company? The Pekisko formation isnotoriously variable, as can be seen in Crew energy's presentation, wells canIP between 800 boe/d - 100 boe/d. The likely economic cut off is probablysomewhere around a 200 boe/ d mark. (I haven't done in-depth analysis on theeconomic cut off, it could be higher or lower.)
 
Conclusion: InternallyCLL seems to be on the right path towards recovery. The Algar project seems tobe still ramping up, less operating issues and high oil prices all suggest CLLwill continue to thrive. A few missing/unproven pieces of the puzzle needto be put together, such as the value of the Pekisko play and debtrestructuring over hang. 
 
Disclosure: Long CLL