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I just wrote a novel with some thoughts in reply but somehow...

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Rob79

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24/02/15

12:30

Post #: 14807943
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Originally posted by cmonaussie ↑

Thanks for your help there Rob.

What I was trying to figure (and maybe its not all that easy) how much production growth is organically being created over time.

I've seen measurements such as DACF - for Debt Adjusted Cash Flow - where simply the interest payment is being taken out so as to get a feel for how levered the CF really is to the capital structure (I think another name for that is Funds From Operations).

Maybe it ought to be debt adjusted production growth - but what adjustment would you make.

I tried to find some further detail on "equity adjusted production growth" but found very little that wasd useful - a presentation from Lehman Brothers (had to laugh) but their comment was similar to James'

"Equity owner benefits if reserves and production per share grow faster than the balance sheet."

So they value per share growth over absolute growth.

On your graph, I took a quick look at the last 4 Qtrs - because the shape didn't seem right to me.
I just used from ASX Qtrly the shares outstanding and the Qtrly total Boe

Mar'14: Boe = 37,259 & Shares out = 2,547,627,193
Jun'14: Boe = 58,656 & Shares out = 2,837,627,193 (post capital raise & debt drawn)
Sep'14 Boe = 43,362 & Shares out = 2,837,782,958
Dec'14 Boe = 50,169 & Shares out = 2,837,782,022

The ratio goes - and using say per 1,000,000 shares so I don't have to deal with all those decimal points

Mar'14 = 14.63
Jun'14 = 20.67
Sep'14 = 15.28
Dec'14 = 17.68

So even with the CR you got more BOE's per million shares than before - which is good as means capital is being put to work. Obviously Sep & Dec is the shut-in while infield drilling (safety first is good) and you have to expect a big leap in Mar'15 (to Chrys' point of momentum).

The reason I'm looking here is to find something POSITIVE that is not directly linked to oil price (like the Cash Margin discussion). Indirectly it is linked as that 3rd source of capital (cash from operations) is minimized by low prices and as such the reinvestment to keep growing production is reduced.

FWIW.

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I just wrote a novel with some thoughts in reply but somehow lost it in cyberspace. Don't you hate that! I'll have another go later once I finish giving myself an uppercut.
Cheers

SSN Price at posting: 1.4¢ Sentiment: Hold Disclosure: Not Held
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