Jurek; you said that

"Canadian Natural gas prices corrected 47% since Q2. Sep 29 spot price contracts are below $5.5 per Gj . Excellent for the POD1 upstream cost but terrible for the LUKE and for CLL financials.

This dumb integrated model. You can not win with it. (The Luke hedge is for 33% of NG production till Oct and unfortunately attach to the US NG prices which are much higher than the Canadian"

Connacher's Q2 report stated: "In the first quarter of 2008, the company entered into a “costless collar” contract with a third party to receive a minimum of US $7.50 per mmbtu and a maximum of US $10.05 per mmbtu on a notional quantity of 5,000 mmbtu per day of natural gas sold between April 1,2008 and October 31, 2008. This transaction was not meant to speculate on future natural gas prices, but rather to protect the downside risk to the company’s cash flow and the lending value of its assets."

While we lost money on this arrangement in the first half of the year it looks like it has turned out to have been a good move for Connacher in Q3. The URL you gave states that the cost of gas for Friday August 29 was between US$6.40 to $6.70 so Connacher would have benefitted from this costless collar wouldn't it? Connacher's selling 2/3rd's of the natureal gas that it produces to pay for the natural gas that it burns at Great Divide is a wash. The remaining 1/3rd of our natural gas production that we have surplus to our needs that we sell we sold for a minimum of US $7.50 (until tomorow). So it appears all good to me.

I think that the integrated model is working well enough until we reduce the SOR enough to consume less natural gas and increase our surplus natural gas sales which is occurring right now.

Cheers Scott