Connacher Oil and Gas "hunkers down"

  Connacher Oil and Gas is one of three junior oil producers that has gotten good coverage in this blog.Connacher has several blogs covering various aspects of it's development in Workathon.This blog has covered Connacher through the sale of it's Montana refinery and the opening of Pod One and then to the opening of the Algar plant(see earlier blogs).Production has climbed gradually(with the urging of this blog) from 10,000 barrels per day to 11,000 barrels and then in Q4 up to 13,900 barrels per day.
      2016 Production Guidance
  So it is with regret that this blog reports that on January18,2016 that Connacher announced that it intends to have production of only 7000 to 8000 barrels per day.It also announced that both SAGD plants are open although equipment maintenance at both plants is ongoing.Furthermore Connacher announced that production would be only 3000 to 4000 barrels per day in March.It is not said specifically but this blog guesses that this is a result of the oil price reductions.Connacher is one amongst many junior oil producers that is cutting back production.
  Connacher states that they have a cash balance of about $48 million so they are not in need of cash at this point.And they are not running low on oil reserves as they have 8 million barrels of proved,producing reserves and  214 million barrels of estimated proved reserves;they add that their total reserves remain at 436 million barrels.
      A Different Viewpoint
  This blog has encouraged Connacher consistently to increase production.So again this blog tells them(especially with heavy oil) to try and raise production or at least to match Q4 production.I understand that this will reduce North American supply of oil and put upward pressure on the WTI price.On the other hand,the production cost curve should be still going down on  plants that are 8 and 5 years old.In other words Connacher should consider more it's own position rather than the macroeconomic situation.Plus the fact that it is more difficult to produce 20,000 barrels per day than it is to produce 14,000 barrels.They have to increase their own efficiencies in order to grow to a mid-tier producer.In addition, they have still sizeable reserves.Connacher should be aiming at a  $.35 share price not a $.035 share price.                              analysis of resource stocks on Workathon;analysis of resource stocks on Workathon