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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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Message: Re: Finance

Nov 24, 2010 06:21AM

Nov 24, 2010 10:47AM

They are selling assets, that gives them cash to A) either pay down debt at a premium or B) have cash to raise cash to expand.

Obviously maximizing production is important but so is netback. Netbacks are struggling because of pipeline breakdowns playing havoc with crude spread and because they are spending more on operations then in the past, trying to increase production.

Expansion costs about $40000 per flowing barrel, but typically they have only achieved about 65% therefore costs are more like $61500 per barrel. Catch 22, increase production makes sense to expand....spend money on production increases or pay down debt, what to do???


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