I just wanted to throw in my 2 cents about the issues of pipelines since I work for a major midstream company in the patch. Firstly, Keystone will get approved, its just a matter of time. The reason being as mentioned earlier, the US doesnt have a viable option at this point and has to make a decision that will secure its energy source (middleast reserves are highly inflated). In addition to this point, Enbridges "Northern Gateway" pipeline will probably not be built, as Keystone XL is already years ahead of it in its planning. Also, the US government would never stomach the fact that Canada would open up its market significantly to China. As for being worried about diluent supply, Enbridge has already put into service its "southern lights" line, which returns diluent supply back to Alberta from refineries in the US.

As with any area of increased production, transport capacity always follows suite. The greatest worry concerning Connacher in my opinion, is that its production profile doesn't shape up to what its promised to be. Even though they refinanced their bonds, they still run a significant risk of default if they cant deliver on their production. Another concern I have about the company is they place so much emphasis on their reserves as a value adding property. Investors however do not price these reserves into the shares because we have seen in the past that these SAGD projects are extremely capital intensive, and provide marginal returns unless the pricing environment remains good in the long run. In that sense, conventional reserves are far more valuable than those of connachers.