Q1 results- not good

Welcome to the Connacher Oil and Gas Hub on AGORACOM

Connacher is a growing exploration, development and production company with a focus on producing bitumen and expanding its in-situ oil sands projects located near Fort McMurray, Alberta

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jurek

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Q1 results- not good

posted on May 11, 2010 09:59PM

Q1 results are not good.

It is very discouraging to see the cash flow in the single digits ($3.9 million) when OIL price double. It looks like regardless of commodity prices, CLL cannot generate any significant cash flow to support the interest obligations , never mind the expansion.

The cash on hand at the end of March was only $118 millions. Most of this will go to pay the interest obligations ( ~$95 million) and remaining 2010 capital spending will be supported by the credit line (more debt).

If WTI stay at about $80 CLL will have to borrow money in 2011 or dilute shareholders with new equity.

MRC refinery was selling their production below cost at 8% negative margin. Bitumen production is stuck 25% below design capacity, Conventional (most profitable) Oil production and Natural Gas is down as well.