Connacher Oil and Gas Chart Update
posted Apr 5, 2006 at 05:25PM
The main reason for an updated chart is the discovery of the channel which appears to be the governing structure of the stock.
Up to now I have been seeing this as a series, or a step ladder formation of surges, followed by consoldation patterns.
The chart is still digesting the acquisitions of the 8000 barrel/day refinery in Montana, as well as natural gas producer Luke Energy. These acquisitions will give Connacher control of thier entire oil sands production process.
Right now the market is awaiting EUB (Alberta provincial) approval to start building a 10000 barrel/day production facility at their Great Divide oil sands project. The CEO has given a timetable of 300 days from the date of approval to first steam in the ground. So say one year to get up to maximum production.
The approval is overdue. This is due to Connacher submitting a revision to their original production process, which entails incorporating better cost saving technologies. This has added to a bullish "wall of worry". The oil industry has been a cash cow for the province. I just cannot imagine them turning it down.
Also on the horizon is an udated reserve report, which again the CEO has stated, will support yet another application for another 10000 barrel/day production facility.
So not even factoring the addition of PODS 3, 4 and maybe 5 down the road, one can reasonably speculate that Connacher will be producing a minimum of 20,000 barrels/day in two or three years time.
Even with a price of $50/barrel, the math becomes quite compelling.
Again I own this stock.