NN,
I am not sure if you are aware that CLL is producing the Bitumen, adding the diluent and selling the Dil-Bit. They do not sell the WTI oil.
Forget about WTI hedges. Their hedges are "out of the money".
At today WTI oil prices CLL netbacks (as per management at the Conference call ) are $5 to $10/bbl of bitumen and not the light sweet WTI.
This is how it works:
Assuming annual $80M interest payments and full 10,000 bbl/d bitumen production and 350 day of operation you need $22/bbl netbacks just to pay the $80 millions interest.
From the conference they would like to have:
$18 operational cost (last year average was $26/bbl) +
$5 transport +
$22/bbl interest payments,
total cost of $45/bbl of bitumen.
If the CND$ stay at this level this would translate to about $70 WTI in US$.
This is with zero profit.
MRC, LUKE and Conventional oil will generate some cash but this will all be spend on maintenance, Capex, and G&A cost.
