Hi 2violins.

I read your post with the great interest. Unfortunately I have to say that your conclusion about CLL being able to cover the interest expenses using the operating netback from conventional assets (LUKE ,Refinery) are wrong.

When you look at the 2007 numbers and projected 2008 conventional Capex and production you will see that LUKE and Montana will not be able to cover interest expenses for OILSAD DEBT. LUKE including the CAPEX will run big deficit.

Truly this is not about criticism. I believe that you simply forgot about expenses and your LUKE 2008 production is over estimated. Luke may exit 2008 with 3400bbl/d (average 3100bbl/d-check the latest presentation from Jan 2008).

The only hope that CLL will pay upstream, downstream, royalties, taxes, general expenses and interest obligation is POD1 average daily flow about 6000bbl/d .

Here is some hard core numbers based on 2007 CLL financials reports with the addition of Q4 which will be released in late March, I believe. Net 2007 Q4 cash flow will be about -$0.01 to +$0.01 depends of the exchange rate apply to refining margin and NG cost for POD1 circulation.

Total 2007 operational netbacks : $75.8 mln

2007 Expences:$40 mln (tax, general&administr, interest)

2007 Expenses including Conventional Capex : $90mln

2007 deficit: $14.2 mln +about $5 mln NG cost for POD1 circulation.

Deficit was cover by equity issue. Official 2007 earnings will be about $0.22 to $0.25/sh artificially lifted by adding the non cash items which is ok  but do not contribute any $ to CLL acc.

<b>2008 POD1 net cash flow $24 mln<b/&gt;

Some details:

2007 PNG (conventional OIL&NG) Netbacks: $21.8mln

first 9 months: $16.8mln +Q4 $5mln(slightly higher ng prices in Q4).

2007 Refining Margin : $54 mln

first 9 months $43 mln +Q4 $11 mln 9(lower margin in Q4 and higher CND$= lower profit).

Expenses : Taxes: $24 mln, general/administration : $8, interest charges:$8 mln.

2007 LUKE Capex was about $40 mln

2007 Montana Capex was $10 mln

Bitumen price Jan 18/2008 …. $56

2008 POD1 revenue at 7200bbl/d average (as per CLL forecast)&hellip; $141 mln

Upstream cost $42 mln

Downstream cost $12mln

Royalties $ 1.5mln (old system)

2008 Interest on debt (including $344mln 2008 Capex and debenture) …$52mln

2008 POD1 tax $12 mln

2008 POD1 total expenses $117 mln

2008 POD1 net cash flow $22 mln

2009 interest expenses ( pipeline and winter drilling) ..$85 mln

POD1 Royalties 2009 …$10 mln(new rates)

<b>2010 POD1 Royalties …$68 mln (new rates)<b/>

2010 POD1 net cash flow (interest split POD1/POD2) …$40mln

2010 POD2 net cash flow&hellip;$70 mln (dropping to $40mln in 2011)

2010 $0.32/share from oil sand production

If WTI oil price go higher ,rise in CND$ ,lower refining margins ,higher royalties may offset any gains in bitumen prices.

2010 takeover offer at $110,000 per flowing bbl/d +$2 for conventional assets adjusted for the debt&hellip;….$9/share.