Do you not agree with the companys outlook for integrated netbacks?/clamlinguine

The shor unswer is not.Please read the disclaimer for the integrated netbacks on the slide #8:

“The integrated netbacks are illustrative based on certain assumptions noted and do not reflect Connacher’s historical netbacks on the current stage of development.”

1. Management assumption are not real. For example ,WTI/NG ratio is more then 12 and not 8 as noted on the slide. LUKE netback does not include the necessary CAPEX related to the 25 to 30 % depletion which in present Canadian NG prices totally eliminate the netback. In reality Refining margin are always going opposite direction to WTI prices not like in the slide #8 were they are in sync.

Illustrative slide does not include expenses like taxes (24mln in 2007) general/administration (8mln in 2007) and interest charges (8mln in 2007).

2. CLL cash flow from Conventional O&G ,Oil sand POD1 /POD2 and Refinery should be taken as separate entity .Remember CLL do not use LUKE NG and Montana Refinery is processing oil (91%) not a bitumen and is selling their product in $US.

IMHO it is essential for financial analysis to use separate revenue and expenses for each entity.

Using the Integrated Netback from the slide #8 will always lead to misleading conclusion and imaginary numbers.

JUREK