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Connacher Oil & Gas Ltd CLLZF

"Connacher Oil and Gas Ltd is an oil company engaged in the exploration and development, production and marketing of bitumen. Connacher holds two producing projects at Great Divide are known as Pod One and Algar."


GREY:CLLZF - Post by User

Bullboard Posts
Comment by rehsifylfon Jan 11, 2012 2:35pm
588 Views
Post# 19392625

300% not good enough?

300% not good enough?

I love the guys (maybe girls) on this forum that suggest that $2 or even $3 per share is not enough. 

2P are 2P.  SAGD is capital intensive and there is no tap to turn on to get the 2P out.  CLL has burned through a lot of dough to get 15K bbls per day out (which over 25 years is about 1/4 of the 2011 2P).  You got to have deep pockets to play here and this company doesn't have 'em. 

That market values CLL with current status at about 50 cents.  That's what it was trading at before this started.  Why 50 cents?  Mainly becasue they have demonstrated some ability to turn the 2P into production, but a much greater ability to turn money into vapour (interest payments, failed investments, and now high severence).  The risk of them leveraging even more was higher, believe it or not - the risk to oil prices are still all their 9even if the media isn't reporting on it this week).

Most investors would look at CLL's record and suggest that giving them more time just gets them closer to insolvency. 

However, to someone who has access to capital this is worth more than $1.  Probably more than $3.  Very likely up to $10 - becasue the 2P number is going to keep climbing.  But the buyer only has to pay what the seller will sell for.  Typically that is a 50-100% premium so $1.5 to $2 will probably get it. 

Bullboard Posts