DK

“Scotia Research in line with Jurek, posts that Connacher will run out of cash sometime in 2010 if oil prices fall and/or they can't secure additional financing.”

Reminder = Get out your spreadsheets and work it out. My calculations (and my dartboard) say that this statement is true BUT only if the variables do not change too much from today. E.g.

1.) Reduction in costs approaching $18 per barrel from $20 could add something like 15%-20% to the bottom line. This is something which is under management control to some extent.

2.) Something that is not under management control however which will make the greatest difference to the outcome is the price of bitumen. If the price increases by only $10 this can add between 60%-70% to netbacks and therefore to the bottom line.

3.) MRC starts to add to the bottom line instead of draining cash.

Management will still need more finance to finish Algar but that will be easier to put in place if oil/bitumen can sustain a higher level for a few months.

Likely outcome? Don’t know, management can only do so much to help it is in the lap of the Gods I’m afraid. So it remains in my book as a speculative stock and I will consider it as such in my dealings. Many others will have the same opinion I’m afraid and there are so many other opportunities out there which are much less speculative. Sorry but I don’t foresee a great rush to buy right now. Can only hope this changes later and CLL becomes worth the risk to buyers.

Cheers

Den