Thoughts From Abu Dhabi
posted on
Feb 08, 2009 09:31PM
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
Here goes for my next disjointed post.
1.) Sharky, futures will always trend towards the spot price, the nearer we get to the date. Unless there is an increase in the current spot price we will always see the futures retreating. Remember we did see a super contango earlier with no subsequent increase in spot and so this retreating of futures price is somewhat amplified. Aside form my sabotaging all the oilfield out here I cannot see an immediate recovery of the oil price. It will take some time but we will get there eventually.
2.) Rebels the new pebble bed reactors might be a good solution for the oil sands industry. They have been proven to be intrinsically safe and are very scalable. I am not sure how they compare price wise with conventional reactors.
3.) Booster/Goingsolo, If we do ultimately need help and there was no chance of loans from government, then I would prefer the partnership solution rather than a full buyout. I too like the idea of shared PODS as it would at least mean we have a share of something we have all believed in for a long time now. It may also be a good idea to have an option to buy out the partner with a premium when the good times return.
4.) Excellent post Jurek on the covenants, and I do hope your recovery is swift. Management are for sure trying their best to find a contingency plan if $65 oil does not materialize soon. One day sometime in the future that $65 will be history and everything will be smelling of roses. Problem is we may need a solution to the predicament earlier. One thing is for sure Connacher are not the only ones in the soup. Pity we are not a bank then we could rest easy.
5.) Booster well done on your post about the covenants and between you and Jurek we seem to be getting a clearer picture and perhaps a realization of the problems facing Connacher. Rebels I wish you were correct and the picture was more rosy but Jurek has been consistently right for the most part on all subjects he has so far discussed so I am reluctant to go out on a limb and doubt him on this. Anyway your posts are drumming up great debate and are also highly appreciated, thanks for that.
p.s. As far as the US and Global recovery is concerned it seems a lot of people think we are putting it all behind us soon but I would encourage the reading of John Mauldin for all before you decide.
http://www.frontlinethoughts.com/gat...
Regards to all
Den