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Gold/Mining/Energy : CLL oilsands play -- Ignore unavailable to you. Want to Upgrade?

To: JSB who wrote (523)

11/26/2012 2:42:01 PM

From: SofaSpud

Respond to of 549

Connacher caught up in even more uncertainty TIM KILADZE
	Capping off what has been a tumultuous year for Connacher Oil and Gas, the shrinking energy company is now looking for a new chief executive officer. On Monday, the company announced that its interim head, Peter Sametz, will step down as of year-end. To recap, here’s what’s gone down at Connacher in 2012: In January, management was suddenly shuffled, catching investors off guard. One month later, Mr. Sametz was installed as a temporary CEO. A few months after that, there was speculation the company could get wrapped into a joint venture with a foreign buyer, or get purchased outright. Now the interim CEO is stepping down. That Mr. Sametz is leaving isn’t all that shocking. He was put in place to advise the board on strategic alternatives – a sale, or asset sales – and he always kept the interim title. But the company isn’t in the state it hoped it would be following his short reign. Mr. Sametz was supposed to put the company in a prettier position, possibly making it look better for a buyer, but the shares have actually plummeted 57 per cent this year and just recently hit a new low for the year. Connacher has certainly attempted to get its act together. In the past two months, it got approval from Alberta’s Energy Resources Conservation Board to develop its 24,000 barrel per day Great Divide expansion project, which erased one of the question marks for any potential suitors or investors. And in early October, the company tried to explain how it would right the ship – a plan that included shipping oil by train and “re-instituting” work on a diluent recovery unit. The problem, though, is that even after selling such assets as the Great Divide Pipeline Co., the company is still awash in debt, and it lacks the funds it needs to develop its hefty oil sands assets. And now the company has no offers on the table. Earlier this month Connacher announced that it “has not received any compelling offers for a significant joint venture, sale or business combination involving the company.” While there was chatter that a foreign buyer should come in and either buy the company or initiate a big joint venture, “recent geopolitical decisions regarding foreign investment in Canada have resulted in uncertainty and, until clarified, impact the future outlook for strategic initiatives involving foreign entities.” With any transformational deal on the back burner, or erased altogether, the company has to rely on its own cash flow to grow, and that won’t be easy. Last quarter operating cash flow came in at just 3 cents per share. The bright side is that BMO Nesbitt Burns believes Connacher can retain enough liquidity to execute its plans, such as spending $95-million next year, through 2014. But these plans are going to have to be executed under a new leader, and who knows how much he or she will shake things up. Conncher’s market capitalization is now just shy of $150-million.