Twin Butte Energy Ltd TBTEF

Average WCS YTD Price to hit $72 tomorrow

[MikeOxLong7]

The average WCS YTD price is set to hit $72 tomorrow and continues to rise with narrowing WTI/WCS differentials ($15.77 today). This is $3 over TBE's current guidance. Calculating from their sensitivity analysis on page 9 of TBE's presentation a $72 WCS will add an extra $12,600,000 in projected cash flow for 2013 before hedging.

After all the dust settles on the oil rail hauling boom TBE and other heavy oil operators near the CN mainline are going to be the biggest benefactors for the following reasons: 1) Single haul efficiency direct to the gulf coast where the market is and unloading capacity/efficiencies continue to increase. 2) Diluent cost savings... blending costs have increased of late but they can be eliminated by rail... this provides a cost savings for heavy oil producers that light oil producers using rail will never see. 3) Back hauling diluent potential. TBE could potentially back haul lower cost diluent to offset their blending costs for the product that moves by pipe and even potentially sell it.

https://www.psac.ca/firstenergy/