Cameron/Rock,

It is good to see someone taking the initiative and trying to make sense out of it using the boe integrated approach. Good positive DD on your part.

There is one thing I would like to bring to your attention (others may take a note if you wish since this is a myth circulating on the board).

CLL dose not have the hedge on the Bitumen. The hedge you use in your calculations is WTI hedge. For a luck of better word this is a monetary hedge attached to the price of WTI oil.

First one is on WTI 2500 bbl/d at $46/bbl with the expiration in August. The second one which start in April for WTI 2500 bbl/d at $49.5 expires in December.

As of today hedges are "out of the money" and do not contribute any monetary gain to CLL account.

Making the long story short you can not use the WTI OIL hedge prices as the bitumen prices to calculate POD1 netbacks.

On the Conference call (see my previous post) Management reviled that as of now POD1 Bitumen is sold for $25 to $30/bbl and their netbacks are $5 to $10/bbl. The average POD1 production in 2009 will be about 8000/bbl.

If the Price of Oil stay at about $50/bbl POD1 will contribute $14 to $28 million of cash flow. Remember that this is not free cash flow. You have to subtract from it the Maintenance and Investment Capex ($10 to $20 million).

One last thing, CLL does not sell the boe because nobody is buying the boe.

POD1, Luke, Conventional oil are separate operations. Taking them as one and using the boe will not let you to right numbers.

Luke and conventional oil at today prices may add about $13 to $15 millions netbacks.

I think that MRC $8 margins you use make sense.

This will bring us to $51 to $67 million of 2008 cash flow.

Now this is important. To get the free cash flow you have to adjust above cash flow number by G&A expenses, Capex and $80 million interest expenses.

PS. Since Rock in not posting here maybe you give him a chance to read my post by reposting this on the SH board. I think he deserves common curtasy.