Re: CLL will hold their own and go up from here/2C

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Connacher is a growing exploration, development and production company with a focus on producing bitumen and expanding its in-situ oil sands projects located near Fort McMurray, Alberta

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jurek

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Re: CLL will hold their own and go up from here/2C

posted on Oct 05, 2008 03:07PM

Very good observations.

IMO the only significant cost adjustment can come in the form of lower NG prices and lower SOR. SAGD use approximately 1 mcf of NG for for 1bbl.

Some suggest that the pipeline will lower the transportation cost.

Do not forget that pipeline will increase the financial charges cost and the maintenance. Pipeline is a very low margin business and you need big volume to brake even.

Last time I check the the pipeline cost was $120,000 per 1mile of 1" pipe. The cost of steel just double this year so this maybe closer to $150,000. Over 100 millions for 8" /100 miles.

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