RE:RE:Jason presenting nowHmmm... I was at the conference as well. I spent quite a bit of time talking with CNE CFO Jason Bednar, the presenter for Canacol. He said finances were in very good shape for the company. The debt to cash flow numbers are much improved in the last 20 months. The new pipeline is on time and it looks like it will be under budget, proceeding at a rate of 2 km per day. Look for a completion date on or before December 1st. There will be a subsequent wall of cash coming into the company coffers, almost a 50% increase in cash flow. They are making profits on the gas contracts that any company in North America can only dream of. Less than $1 all in cost and over $4 profit. What’s not to like about this picture???
In another year and a bit the next pipeline will also be added, pushing their production another 100 mcfpd to bring their total to 230 mcfgpd. The depletion rates of these wells is about 10% per year. So that means that to maintain their 230 mcfgpd the would only need to add around 23 mcfgpd of new production per year (ie. 10% of 230). (Their last well tested at double that number!) Their success rate in the basin is at 90%. They have the seismic mapping of prospects down pat, using industry leading AVO seismic technology.
The market will will have to realize at some point that the economics of CNE have changed and will be changing even more in the very near future.