It is interesting how many of us will get a different picture when reading or hearing a company’s year end report to investors. Many perspectives have been offered and as such am putting forth this perspective. Specifically I heard and made the following notes:

1. As mentioned in previous posts, Connacher will be optimizing their throughput
2. There is no need to raise cash in 2009 as they have significant cash balances on hand
3. No loan on the unused credit facility, no interest payment
4. MRC average bitumen return is at a higher price so far this year than in a similar time period last year
5. They added 2 more wells to use their EXCESS steam which will decrease the steam well ratios
6. They now have more heavy oil Upgrader plants that are vying for CLL output

While there is a cumulative effect to the bottom line, we have not heard any guidance from the company and will not hear that as it is not their policy to do so. Instead we have various board members providing interpretation. Here goes on a partial perspective from me.

1. I think all board members realize that the greater optimization that occurs, the bigger difference there will be to the rate of return. Various numbers have been offered as to what they will be, I am comfortable in understanding that there will be a lower cost for every barrel produced.
2. Earlier we heard from some that there is a need to obtain funding in the very near term in order to keep the company afloat. Furthermore their burn rate was excessive. Clearly the burn rate is lessening due to a number of circumstances (price of product sold, efficiencies gained, etc.). In other words they do not need to undertake IF THEY SO WISH any further financing for at least the next 12 months (one year).
3. Self explanatory.
4. In spite of the USA downturn, the Montana refinery is already gaining a higher price this year than in similar time frames of last year for their product. This is before their hopeful comments of higher prices this summer due to the American infrastructure initiatives using bitumen.
5. To me this is the most exciting news, instead of the electrical co-generation facility with its attendant capital cost which was previously planned, they are now going to be using the UNUSED steam with the two newly drilled relatively low cost wells to increase throughput. Effectively by just completing this initiative they will raise the output using the same amount of energy by about 8.5% or 879 boe/d. This will then, by itself, bring the production up to 11,220 boe/d which they are allowed to do as long as the average for the year is 10,000.
6. There is competition amongst upgraders for Connacher production and as Long Lake is in need of outside bitumen which will probably continue for at least a one year period, they will be actively placing a premium on product sold to them. That together with the 1/3 less travel distance and consequence lower transportation cost makes this another significant benefit to bottom line.

Just a couple of thoughts from a very infrequent poster.