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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
Message: Connacher: main headline in today's Calgary Herald Business Section = not good
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I guess on this board we are all far too positive in our view of the Q-3 Report. Just look at the top headline today in the Calgary Herald Business Section.
http://www.calgaryherald.com/business/energy-resources/Connacher+earnings+drop+cent+third+quarter/3812919/story.html
The street is viewing Connacher's Q-3 Report as an 83% drop in earnings during the third quarter from $47.8 million dollars down to $7.9 million dollars. This is how the retail public is going to view Connacher shares going forward. This is not good news at all as we all know how the press can ruin reputations in a minute. Hopefully, virtually no one will read this article and it will be forgotten in a week or two. A good Q-4 Report by Connacher will put this to rest.
CALGARY - Connacher Oil and Gas (TSX:CLL) saw earnings plunge 83 per cent during the third quarter but managed to keep in the black on strong operating margins at its refinery in Great Falls, Montana.
Connacher posted earnings of $7.9 million, or two cents per share, from $47.8 million a year prior, the company said Thursday.
The bottom line was supported by margins that jumped 50 per cent at the company's Montana refinery, lifting profits hit by foreign exchange losses and increased costs.
"Our Great Falls, Montana refining operation had excellent results in the third quarter and year-to-date, in part capitalizing on widened heavy oil differentials which emerged during the reporting period and persisted into October," chief executive Richard Gusella said in a statement.
"Significant net operating income was generated, buoyed by higher commodity prices and strong asphalt markets."
Two pipeline outages on the Enbridge oil system during the quarter provided widening differentials for heavy oil that benefited the refinery and partially offset dampening effects on bitumen prices, the company said.
Cash flow during the quarter rose to $15 million, or four cents per share, from $10.4 million or three cents per share a year prior.
The Calgary-based company said production from its Great Divide and Algar oilsands projects rose to 14,000 barrels per day.
Revenue during the quarter slid one per cent to $150.3 million, from $151.4 million during the same quarter in 2009.
Analysts expectations had been for a one-cent loss on revenues of $150.0 million, according to Reuters.
Also on Thursday, Connacher downgraded by $10 million its expectations for 2010 earnings before taxes and depreciation to $60 million on lower bitumen netbacks due to increased costs and wider differentials.
The company set a capital budget of about $104 million for 2011 for the development of its refinery in Montana and its oilsands exploration program.
It sees 2011 production of 16,300-18,700 barrels of oil equivalent per day.
domeara@calgaryherald.com
With files from Reuters
© Copyright (c) The Calgary Herald
Cheers; Scott
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