Marlboro

Current AVG prod is 14,500 * 365 = 5,292,500 annual production

5,292,500 * $35 = $185,237,500 Revenue from current production levels.

AVG operating costs 6 months ending June 30 2011 $20.22 BOE

AVG Royalties ( tied to $ of barrel) $3.06

Total costs per barrel $23.28

So $35 would provide a netback of $11.72.

Now you'll notice that interest costs are about $15 per barrel so the above netback would be short $3.28 per barrel or $17,359,400.

So on revenue at $35 CLL would incur a $17,359,400 loss..Now is this really a loss? If oil were to drop down that low, operating costs would also drop. Natural Gas, chemicals, transportation etc. Royalties are based on price of barrel if I'm not mistaken, lower prices lower royalties. CDN dollar has an effect as well. Increased production would also mean lower price required ETC ETC..AS you can see the savings in costs would more than likely make up the $3.28 shortfall.

EVEN STILL that $17,359,400 is easily covered in revenue from the refinery and other sources..

So when one takes the time to look into what managment says you'll see the number makes sense.