Thanks RDOTT for making an effort regarding the POD1 OP (operational) cost.

I am disappointed with myself. I thought that cash flow model presented here so many times made some long lasting marks and most of the posters would know what is the CLL cost structure and how the cash flow is generated.

Sorry but I cannot present this in any better. Maybe some pros will help me here. For those who do not like the numbers, please read the headlines only.

Before message get lost in the process here it is:

February net cash flow per bbl for POD1: zero=0

February Average Wighted bitumen price at Hardisty : $27 per bbl

CLL Average Wighted bitumen price sale : $26 (5% less as at the Hardisty based on the history of Q2 and Q3.

Operational cost : Q3/2008 --- $25/bbl Q1/2009--- $20/bbl (see note)

Transportation and Royalties(1%) Q3/2008 ---$10 /bbl Q1/2009 --- $6 to 7/bbl (see note)

Total upstream and downstream cost $26/bbl

Note. The hedges were sign in January when the prices were much lower then the average February price. The average NG price dropped from Q3/2008 $7.4/GJ to Average Jan/Feb $5/GJ GJ and $4.4/GJ as of today.

The biggest misconception you made is that the POD1 NG is free.

The Luke cost (OP + Royalties +transport) is about $2.2/GJ. This give the netbacks of $2.2 /Gj at today prices. Total Luke Cash flow in Q1/2009 will be about $2.7 million which together with MRC and Conv OIL will cover the CLL G+A, maintenance Capex and taxes.

POD1 has to pay for their own Natural gas which is charge by local Natural Gas provider at retail price with the industrial discount and does not go down us much as the NG market prices (see your own monthly Gas bills).

Considering necessary annual LUKE Capex related to NG depletion you can consider the LUKE as a net lose for CLL or brake even at the best. LUKE cost us about $250 to $270 million so far. POD1 unfortunately has to stay on it`s own.

Last Thursday Bitumen price went up to about $35/bbl at Hardisty. CLL will not enjoy this increase due to the partial hedge and it looks from the overnight futures the Oil will go down on Monday. The increase maybe not be sustainable but if it is and CLL some how could get $33/bbl the:

POD1 cash flow for bitumen at $33 is $7/bbl which will generate $6 million per 1 Q. Interest expenses are about $22 millions per 1 Q.

As I posted for Sharky :To cover CLL interest expenses (with one POD producing) price of bitumen has to go to about $47/bbl.

The CLL dramatic debt expansion is sustainable only if POD1 + Algar is producing 20.000 bbl/d. POD1 by itself cannot do it with out major increase in OIL price.

Since the CLL line of credit is "frozen" company cannot go ahead with the ALGAR. Something has to happen here.

Cashing the currency swap was a desperate move and exposed our debt (which is in the US$) and added 25% to our interest payments at today exchange rate.

This post is way to long. I was hopping you will not respond and we can have a quiet Sunday.