Bobert:

"Dick arranged currency and oil price hedges. Currently, are we benefiting from these measures?

If you look at the information from the Q1 report below,you'll notice that CLL can survive fiscal year 2009 with oil at $45 U.S WTI. If you look at the information you'll see the first hedge ending in August 2009 for $46 second ending Dec 2009 $49.50 and that if I'm reading it correctly only 2500 bbl/d or roughly 33% of current production is committed. Also the currency hedge was calculated I think with the CDN dollar being around .82

Looks like a SHITE deal now with oil trading $68.60 ( although many feel this is too high and will soon face a major correction back to the mid 50's or lower) and the CDN dollar trading around .9246 but you must remember the conditions in which these deals were arranged.

At the time of the deals oil was ranging around $40 ( with many saying the bottom will be in the 20's) and the CDN dollar was ranging in the high seventies, the deals were at a premium price.

So when it's clearly stated they need $45 to survive 2009 and YOUR MAIN OBJECTIVE IS TO SURVIVE THE CRISIS then at the time hedging a percentage of your production in order to guarantee your survival was not only a smart move but a necessity. Hindsight is 20/20 , the market could have gone either way and still may,,many are also saying this rally won't hold and new lows will be tested. Another thing people are biatching about is the offering being made at .90.. AGAIN when negotiations began SP was probably below .90 so again it would be a premium..The financial institutions aren't morons, they have well paid professional analysts as does CLL. They know the run up wouldn't hold and NOBODY would buy shares at the HIGH of a cycle. If you look at the 90 day moving average and the corresponding price channel then .90 isn't a bad price. Yes it's a 13% discount over closing SP the day prior to the announcement, but in the big picture it was fair.

REMEMBER PEOPLE EVERYTHING MUST BE KEPT IN PERSPECTIVE, you can't apply current conditions to the conditions when these deals were made.

FROM 2009 1ST QTR

Simultaneously, motivated by our anticipated cancellation of our credit facility and benefiting from the emergence of considerable contango in the crude oil futures market, we were able to place two attractive WTI hedges for average prices of US$46.00/bbl and US$49.50/bbl, on two tranches of 2,500 bbl/d of notional production with staggered August 2009 and December 2009 maturities.

Our internal estimates indicate we have sufficient cash and prospective cash flow, at US $45.00 for WTI, to meet all of our cash requirements for our reduced capital budget of $124 million and to satisfy our financial obligations for the balance of 2009.