Connacher Oil & Gas Ltd CLLZF

What if re-financing dosen't happen?

[bnw]

I don't see this company folding.  The resource base is too valuable and with the production gains which are proving out with the SAGD techology we can expect significant production increases immediately and for many years to come.  My read of the financials indicates that sigificant debt needs be retired only in 2018, 5 years from now with more debt scheduled for retirement the year after.  In business, debt seldom disappears as new debt is usually undertaken to pay-off expiring debt.  In the meantime, Connancher in the 2nd Q has shown itself, at current production levels, capable of almost meeting its liabilities and capital expenditures from positive cash flows from operations.  Increased production will remove the almost in my previous sentence.  So what are we left with?  A going concern able to increase operational cash flows, able to conduct business without reliance on new financing inflows and most likely over the next five years gaining sufficient credibility to retire its current debt with new financing on better terms.  My bet is that the new financing will occur before 5 years as lenders grasp the potential and improved safety of investing in Connacher.  What can impact my rosey scenario?  Prices, transport, macro economics, market sentiment, environmental issues, management errors or incompetence ... in short the same things that would adversely effect any resource company in the oil sands.  What I've witnessed thus far with Bloomer and team gives me confidence on the management side, something I don't have with every company.  Sentiment is tougher to gauge and reverse.  Obviously many investors have been crippled by Connacher's past performance and will need see solid evidence of improvements before getting back in.  Some many never come back.  Should the share price drop below 25 cents (just 1 penny below present), I would have to guess that sentiment is solidly against Connacher and it will be a long up-hill battle to achieve confidence.  However, should the share price appreciate in the next few days, we could see a bandwagon effect that could push this stock to the high $ .30's.  Just my humble opinion as to where we stand now.  GLTA