Had to move out of CLL for a weekBut back in now. BNK got hammered down, so I had to free up some cash to buy in the 8.3s. Now that it BNK is back up, I sold some this morning, and bought back 75K shares of CLL.
Here is the interesting part. The entire block went through Alpha at 1.4 and right after, a 500 share sale moved it back down to 1.39. I like to see that. The intent is to get more of the very long holders to give up on this stock, and based on what I'm reading, that is working.
I saw a presentation by Merle at the World Heavy Oil Congress speaking to how they dealt with lean zones at Great Divide. Spoke to him afterwards. I'm not a reservoir guy, but could easily understand what the issues were and how they dealt with them. More importantly, the ALGAR area doesn't have the same issues - which is why production is ramping more quickly. If anyone wants a copy of the paper, inbox me.
The issue with CLL right now is that based on the Q1 report they issued awhile back, they got caught napping in Q1 regarding bitumen pricing and distribution options. Thats going to mean Q1 numbers are poor - despite high oil prices, and, at least post February, significantly improved bitumen production.
The potential upside on the Q1 report, is the Production numbers for April. They should be really good. Maybe even better than really good. The more they can produce from existing well-pairs, the more positive impact that will have on the reserve numbers this year. And, of course, the real value of CLL is in the reserves.
One thing to consider regarding HO in Alberta. SAGD is not like flicking a switch. Numerous operators have found that out (some have learned, some continue to make mistakes). A company like CLL has some of the best experience in the industry, and that has high value. So aside from reserves, and production, a buyer would be interested in CLL because they have the people, particularly on the down hole side, that understand how to make this work. Those learnings can easily be applied to a much larger commercial operation.
So - while, buyout is touted on every board for every junior, to me, CLL is a real candidate. Their are many players who would like to get into the Alberta HO play. I fully admit that the price for CLL would be high, however, CLL is several years ahead of any other potential HO buyout candidate, and for a company that wants oil in 2012 or 2013, by far the best bet.