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Gold/Mining/Energy : Oil Sands and Related Stocks -- Ignore unavailable to you. Want to Upgrade?

To: RossA who wrote (15570)	3/24/2007 10:10:17 AM
From: Metacomet	Read Replies (2) \| Respond to of 25575

The problem with CLL is that their valuation is based on reality with an unjustified risk element factored in. Obviously the market is more enamored of values such as BQI's so far fictional, but huge, lake of Sask bitumin that is only limited by ones imagination. A similar valuation method is being used for PBG's subterranean bitumin upgrading process. It's gonna be HUGE......

To: RossA who wrote (15570)	3/24/2007 9:58:43 PM
From: haitokin	Respond to of 25575

Sure Ross, I'll address your point. Using only a production valuation metric of $XX,XXX per barrel of flowing daily production won't assign any value to great divide. Using only a single $$ value per reserve barrel doesn't allow for any distinction between the different value for different types of reserves. What I did when I used some basic valuation metrics to price the convention assets (on production) and then assign a separate value for reserves was to acknowledge that 90% of CLL's reserve barrels are at great divide. Perhaps I shouldn't have multiplied the 93M barrels by $1.25, because a few of those barrels are the underlying reserves of the convention production that I assigned a $50,000 value per flowing barrel to. 3000 boed is 1M annual, ten year RLI assigned to convention assets would be high IMO. Then there's the point that the 93M barrels are only 2P barrels, not 3P. And the new reserve report isn't out yet. The old one assigned 311M barrels recoverable at Great divide alone, mostly all in the 3P category. So if I double counted 10M barrels at $1.25, I wasn't trying to mislead. I only assigned value to 2P barrels, whereas when a buy out occurs, the M&A guys assign value to 3P as well. Right now, noone is giving any value to those barrels, hence the $0.25 price per barrel that you can buy into Great Divide for right now. I don't think I can be accused of disingenuously double counting all 93M barrels, and that therefore I understated the current market assigned value of great divide by $116M. Not hardly. Nor do I think you'd want me to assign no value at all to the reserves at great divide (let alone the construction costs to date, or the NPV of future cash flows) because I already assigned a value based on production to assets that are completely separate from the oilsands. See, these basic valuation metrics aren't that great at breaking out all the differences between say, production from oil, NG or bitumen. 1P 2P or 3P reserves, of oil, NG or bitumen. All separate values. When after a buyout, someone breaks down the purchase price into a single metric like $/flowing barrel or $/reserve barrel, that is disingenuous to the reading public. If I were working in M&A, I'd be asked to show some detail. Here, I can use basic 'back-of-napkin' metrics to quickly get to a point for discussion - 'CLL is wildly undervalued, and I expect that when the paid analysts step in and examine the details, they will tell their investors what I am telling you here - great divide alone is worth CLL's current market cap and then some. All the other stuff is free.' A reply is appreciated. Haitokin Of course, I could have