I would have agreed with you on the similar challenges faced by OPC and CLL last summer. But - you need to look at what is happening with a company - not a static picture. Companies and their prospects are dynamic.

If I show you a picture with two people in the frame, both with their feet 1 foot from the ground. Are they in the same situation? Yes. But the one that is moving towards the ground at Mach 2 because he came from the top of a 20 storey bldg is probably in more trouble that the one that jumped up the 1 foot from the ground. Both these planes were in a steep dive last summer, but CLL pulled back harder on the stick, jettisoned some cargo, and leveled out at 3000 feet. OPC looks like they could easily level out at -1000 feet.

Since the fall - virtually nothing has gone right for OPC, and, while CLL has had their own struggles, far more has gone right than wrong. Production of Bitumen is up, they sold some assets for cash that give them more working capital - thus extending the time they have to ramp up production, and Oil has averaged more than 20% higher than the highest predictions last summer.

OPC's debt is 3 times higher than CLLs, yet their net production is far less right now. CLL is ramping up production, and OPC is at the mercy of Nexen - who may or may not benefit from OPC going down. One is a passenger, the other at the controls. That said - I'm in the camp that says OPC gets purchased, before they dilute. IF OPC gets purchased, watch what happens to CLL price.

The big issue for CLL IMO is the 2nd lien $587M. No doubt - that is a killer, and, why would the banks want to renegotiate the sweet deal of $60M a year for the next 4.5 years on a loan of $587M? Particularly when it is clear that their money is 100% safe - either because CLL will just pay, or because if the company defaulted the 500M 2P has a NAV of about 3 times the debt. I'll tell you why I think they will renegotiate. CLL needs more cash at some point - and will need the debt for decades, not 5 years. Now that it is clear that even with the hindrance of the huge interest, payments CLL can make a real go of it at today's production and pricing - the opp to grab CLL in default is pretty much off the table. The golden goose only lays eggs for another 4.5 years - and then the banks will be lined up to provide replacement financing at half to 2/3 the rate they are paying today. Of course, these banks won't get any of it, after sticking it to the company for 5 years. So they'll have to decide whether they want 7% on ~$1B for the next 20 years or 10.25% on $587M for the next 4.5 years.

No different than when someone goes to refinance their house. If their income situation has improved, and the only impediment to a sound financial position is high interest payments, the bank will re-fi, thereby lowering the interest, thereby reducing the risk of default, thereby allowing them to charge less interest. Add to that the increase in 2P and the NAV of that 2P over the time since the financing was completed, and you have to belieev that even without a re-fi offer, CLLs debt rating will be upgraded in the very near future.

The question here is - how long will the 2nd lien holders continue to feed at the trough of %10.25 before they make CLL an offer. From RG, it sounds like it'll be awhile yet. Bad move on the banks part, IMO - because they are far better off having CLL stay as an entity than they are of having a 3rd party - that perhaps has tons of cash, or at the very least has their own financing (probably from outside of Canada) - buy CLL. A buyer would factor in the $260M of interest over the next 5 years in the purchase price (and if you are buying all those reserves plus an operating plant that is CF positive, and the refinery....what is $260M really?). After 4.5 year, Porky and his friends do well for the next few years, and then are out of luck. The longer they go, the more short term interest they get, but the lower the long term rate will be.

Perhaps the banks have made a token refi offer and CLL has told them to pound sand. IMO, before the debs mature next year, they'll make a good offer. I only hope RG and CLL have learned from the past and negotiate a good rate (perhaps the deal is they replace the 2nd lien $587M with $900-$1B of 2nd lien at 7.25%). That keeps the interest close ($65-70M vs $60M now) and provides the cash for next phase of development.

All CLL has to do is show sustained production and production growth, a good plan (and results) for dealing with HO differentials (and can't see why Montana is not doing at least part of that trick - but I'm interested in what refining shows for Q1). I expect all that will happen in Q2 - and we'll see a big run to the fall - probably doubling from last falls low. The signal that the banks have made an offer will be a sudden jump - which could have been what happened the last time.