Krissy,

I agree on the debt problem. It is like paying 12% mortgage on your house. It is chipper to rent it. Unfortunately for CLL, they have no other option at this time. They have no free cash flow to start paying the debt. The only possibility is outside equity in the form of partnership.

Spide,

I think you are overlooking the fact that the POD1 cash flow will drop by 50% sometime next year. Post-payout Royalty rate on bitumen revenue will jump from 1% to 30%.

POD1 revenue per bbl will drop from $55 to about $40 per bbl. With the expenses (including the interest) at about $35/bbl there is not much free cash flow left for maintenance capex like new well or pumps, never mind any expansion.

PS. Correct me if I am wrong but Dondon never provided and cash flow projection for CLL. It was Cornergas who has excellent spread sheet. Dondon may have not much cash flow left after the PDP crash this morning :-)).

Sharky,

Based on the CLL past your concerns are very legitimate.