I found on the othe board.Something to consider

I spent some time analysing CLLs latest presentation. They go into great detail about the amount of production they'll have by the end of the year, and their past, present and future EBITDA. Lots of stuff on EBITDA but nothing on the most important thing, which is cash flow.

This aroused my curiosity, so I looked up their 2010 Q1 report, and found their cash flow in the quarter was a measly 4 million bucks, or a crummy $4.68/boe. This terrible! Even pure natgas producers can eke out $10/boe, while great oilcompanies make $40/boe.

The difference between EBITDA and cash flow, is that EBITDA ignores interest costs. And interest costs for CLL are over $80 million bucks a year. Even with Algar pumping out at full projected rates by Q4, this company will only be making about $10 per boe in cash in 2011.

There is no way in the world that they'll have nearly enough money to pay down the debt that comes due in 2012, 2014 and 2015. Maybe the lenders will extend their loans, but I sure wouldn't if I were them. Further, I wouldn't advance a nickle toward managements pipe dream of expanding to 50,000 bpd over the next few years.

OPTI (OPC-TSX) is a SAGD producer who thought their bankers would extend their loans too, but they didn't. Ultimately OPTI nearly went bankrupt, and ended up selling 30% of their assets to pay off some debt. The remainder of their debt is priced at near usurious rates, and OPTI's only hope is to sell the company at deep discount to NAV.

I don't say CLL's situation is identical to OPTI's since CLL is bringing their production in on time and on budget, and it's slightly easier to borrow money these days, but if they can't make decent cash flow, they'll be at the mercy of their lenders and don't have a hope in he** of growing the company in the near future.