Coniagas Battery Metals Inc. T.COS

Scenarios for 2015

[namsoc]

All of the oil companies have hit a bad patch here, COS included, due to the drop in the price of WTI.  The lower price will have a major impact on what COS can pay out.  To address this I have run my spread sheet for a range of price and production scenarios for next year.  I have run the following scenarios.  The production range is 270 kb/d to 330Kb/d.  The price range for WTI is $70 to $85.  I did not address the discount/premium to WTI since it varies during the year.   Also I think that as the price of oil drops, the $Cdn drops.  I did not change that rate for the lower WTI prices since I felt it was a conservative assumption to make.  Here are the other fixed assumptions.
 
Total Capex + Maintenance: 600M
$Cdn/$US:  0.88
NG Cost/GJ:  $4.50
Indirect Op Cost (Admin, Non Prod Cost, Etc): $77M/qtr
 
The table below shows the quarterly distributable cash flow for the range of production and WTI price shown.  The table shows that while COS’s problems were masked by good pricing in the past, hence forth, production will have to be good and stay up.  The table shows that COS may have to revert to paying 20¢ per quarter if WTI gets down to $75 and average production is 300kb/d.  Let’s hope that the October numbers are good, since according to guidance, production is supposed to ramp up in Q4.

Namsoc
 
                               Syncrude Production kb/d

WTI Price	330	300	270
85	46.5	37.1	27.8
80	38.5	29.9	21.2
75	30.5	22.6	14.7
70	22.5	15.4	8.2