I agree with your assessment re investors confidence in CLL needing to be earned back.

Re the calculations in my last email I was missing the CLL "quality discount" from the Hardisty dilbit price. In 2009 Q2 the published figures were: USD WTIC 60, CAD exchange rate was .86 giving a CAD WTIC 70. Hardisty dilbit averaged CAD 57 (or 81.2 % of CAD WTIC), CLL dilbit was CAD 52.35 (or 74.6 % of CAD WTIC). Thus CLL dilbit suffers a "quality discount" of approx $5 / barrel. This is disclosed in note (3) on slide 38 of their current investor presentation. After the cost of diluent and transportation the bitumen netback was CAD 41. The royalty & operating costs were $15, resulting in operating cash flow of $26/barrel of bitumen. All this info is in their 2009Q2 report.

The corresponding figures for 2009Q3 are: USD WTIC of 68.50, CAD exchange rate of .91 giving a CAD WTIC of 75. Hardisty dilbit averaged $60 (implying a 20% discount from WTIC). Assuming a $5 quality discount for CLL dilbit, they should have received approx $55 / barrel of dilbit. Assuming similar diluent, transportation, royalties & operating costs as Q2, their operating cash flow should be approx $30 / barrel of bitumen.

On Wed of this week the corresponding figures were: USD WTIC 81.37, CAD exchange of .96 giving a CAD WTIC of 84.85. The Hardisty dilbit price that day was CAD 71.36. Assuming a $5 quality discount, CLL should be receiving approx CAD 66 / barrel of dilbit. After deducting the cost of diluent, transportation, royalties & operating costs they should have operating cash flow of approx $40/barrel of bitumen. That times 9,500 bpd * 365 days / yr = approx 140 MM. The cashflow from other operations should be sufficient to cover all other finance & admin costs. (I realize that only about half or 10MM quarterly of their interest costs are expensed until Algar goes commercial). 140MM/420MM shares = 33 cents/share and with a 10x multiple should translate to a SP of approx $3.

Dreaming further, with USD WTIC @ 95, a CAD at parity, and similar heavy - light differentials, CLL operating cashflow would be approx $48 / barrel of bitumen or 166 MM/ annum which translates to a $4.00 SP. This is why I don't see it as unreasonable for CLL SP to approach or even surpass $5 with only 1 POD in production.

One last point is that I am ignoring the various hedges they have in place as I view them as temporary and they only obscure the underlying real potential of their operations.