"The way I look at it is they are receiving at least and Until end of April contract, which is over, they will receive $79 on another 2500 barrels, the rest is at the prevailing market price"
Spyde,
1. The above statement you made is very confusing for most board members. You should clearly say that CLL is loosing money on their $78 on 2500bbl/d hedge. Most likely they will loose money on their $79 hedge. Additional coral is costless and useless.
They will not loose us much money as on the previous WTI financial hedges but never the less hedges are drain on the CLL cash flow and are added as the insurance only.
One have to remember that the CLL sell their bitumen production to Alberta`s upgraders and receiving local market prices and not the hedge prices suggested above.
2. Some posters are very confused about the Netbacks and EBITDA.
Both these numbers have no practical meaning and are provided for comparison purpose only. Read the management declaimer. Netbacks and EBITDA are not the cash money which are available to CLL to cover their interest obligation or expansion.
Correct me here but as far as I remember CLL had always positive netbacks or ernings before interest, taxes and depresioation. Despide this, they had to go to unpresidented debt (7 times cash flow) and masive share dilution.
The point is that the Netbacks or EBITDA do not tell you much about the financial health of the corporation.
For the short term, as per my previous post , enjoy the ride and wait for sharky oscillators to tell us when the music is fading.