Big improvement in Bitumen price

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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

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jurek

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Big improvement in Bitumen price

posted on Nov 24, 2011 01:54AM

For some reason (?) Bitumen prices improving dramatically in Alberta and in last few days moving much higher while the WTI oil is moving lower.

As a reminder average Q3 bitumen price at the Hardisty Alberta was ~ $44/bbl ( Dil-Bit $58/bbl). Connacher Q3 Bitumen realized price was ~$41/bbl.

Average October Bitumen price at Hardisty was ~ $51/bbl

Average November (so far) is ~$59/bbl

November 22 was posted at ~ $61/bbl

CLL prices may be lower but we are looking at 35% improvement so far in comparison to Q3.

CLL cash flow related to increase in Bitumen price will be offset to some degree by ~50% dropped (November) in refining margin at Montana refinery.

If the price of bitumen stabilized at this level Connacher may generate positive NET Cash Flow which will easily cover the Interest Payments, Capex and may help to buy out the $100 million Convertible due in June 2012 without loading up on 6.5% line of credit.

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