When one looks at the following, considering that we have not made any changes to our NRG division per say among other things, And our pipeline loss ytd is similar to last year.

It's getting a tad perplexing to see the following numbers and certainly begs for some clarity. How in the heck do costs suddenly explode that way ? There is no change to Royalties or Operating cost that I am aware of, and yet we seem to have tripled our royalties and doubled our production costs entry lines compare to previous Q - what gives here?

Sales increase ~ 27% and yet Fund flow only increases by  ~ 4.5%?

If one compare YTD to 2011, with less Revenue and sales to date - we also beat all the COST numbers of 2011.

What am I missing ?

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CDN $ 000's 3 months ended
September 30, 2012
  3 months ended
September 30, 2011
  9 months ended
September 30, 2012
  9 months ended
September 30, 2011
  12 months
ended
Dec. 31, 2011
Petroleum sales $ 65,620   $ 51,309   $ 170,074   $ 137,217   $ 184,100
Less: Royalties and                            
community development contributions   12,369     4,533     26,604     15,730     21,669
Net petroleum sales   53,251     46,776     143,470     121,487     162,431
Less: Production costs   8,409     4,684     21,803     14,285     18,302
Funds flow from production operations $ 44,842   $ 42,092   $ 121,667   $ 107,202   $ 144,129