Krissy;

In theory Connacher's expansion to 33,000 bbl/d of bitumen will come from its cash flow going forward over the next couple of years. That is the plan. Until 2012 it has to pay back about $100 million dollars a year in interest payments. Connacher has used a very conservative netback of $40 for the bitumen it gets. When you did your original assessment you assumed that Connacher's netback for it's oil will be $40.00 and will not go up over the next 2 years. If you think that the price of oil will remain stagnant until 2012 then this might indeed present a problem in terms of starting to pay off the principal on the debt in 2012. I doubt that the price of oil will stay where it is over the next 2 years. The point that I was making was that Connacher also has other assets in terms of the revenue that it gets for its expanding conventional oil and gas production that it sells. Natural gas is forecasted to start increasing in price by the beginning of 2011 (a possibility). This adds to Connacher's cash flow. If Connacher is producing close to 20,000 bbl/d of bitumen in 2012 in addition to 20,000 Mcf/d of natural gas this will produce a huge cash flow to pay off the debt. In your original post you were using 9,500 bbl/d of bitumen to base your numbers on.

In your last post you stated that Connacher would be unable to reach its plan of 50/50/50 and you said that Connacher would be unable to do this as it costs $100,000 per flowing barrel to buy good conventional reserves. Connacher does not need to buy any more conventional reserves. Connacher has 98,000 acres of land with bitumen on it and they have only drilled core holes on 10% of the land that they own to prove up their existing reserves so there is a lot more to be found. Future drilling (as is projected for 2010) will increase existing bitumen 1P/2P/3P reserves. Connacher also owns a lot of land with natural gas on it which can be developed going forward when the value of natural gas rises and makes it worth while to produce it in a year or two. The wild card though has always been Petrolifera. If and it's a big if, if Petrolifera hits successful discoveries in Columbia which is currently the most prospective place to drill for conventional oil and gas today, and Petrolifera's share price escallates again, Connacher could sell its holdings in Petrolifera down the road to pay off a portion of its debt. Petrolifera is a wild card. It reached over $19.00 a share in the past just drilling on recycled oil fields in Argentina. Columbia and Peru (elephant country) are too huge to be ignored. Petrolifera's acreage in Peru is arguably the best 3 leases for oil and gas exploration in Peru, as Gary Wine the President of Petrolifera worked for the Peruvian government when it drew up its leases to offer them to oil companies, which is one of the reason's why Dick Gusella recruited him to become the President of Petrolifera. He helped Petrolifera secure its 3 prime leases before the major oil companies grabbed the rest of them in Peru. Yes, this is a big leap of faith, but it is not a greater leap of faith than the one that many of us long term shareholders on this board took when we originally bought Connacher shares in 2003 before Dick Gusella and management bought 54,000 acres of land at Great Divide in early 2004 for around $1 million dollars and proposed to build a SAGD operation on the land that they purchased. Today POD1 stands completed and in over 4 months Algar will be completed. In 2003 they were not even a dream when we bought Connacher shares. So it is possible. As for comparisons to Suncor. There is no point in comparing Connacher to Suncor and it's current asset sales. Suncor just bought Petro Canada and has a lot of assets that don't fit into its long term plans. Connacher obviously does not have the magnitude of assets that Suncor has nor the luxury of selling them off. The other factor that nobody knows on this board is whether or not there is an end strategy already planned for Connacher down the road. Remember, Dick Gusella sold his previous oil company that he grew to 50,000 bbl/d to Canadian Natural Resources for a tidy sum. Maybe this is the end strategy for Connacher? Who knows at this point? I am just speculating here as I have heard no evidence to support this. But it makes you think. Selling to another company a 100,000 bbl/d company producing bitumen and conventional oil and gas would certainly pay off the debt down the road.

Best Wishes; Scott