BRU 2.22% 4.6¢ buru energy limited

Ann: Weekly Drilling Report - Ungani Far West 1, page-136

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  1. 6,526 Posts.
    lightbulb Created with Sketch. 1054
    CEO.. back of envelope calcs for two wells would put BRU somewhere between 1500-2500 bopd net.. targeting 3000 bopd gross at Ungani and lets say 2000 bopd gross at Ungani far west for example if it comes in..
    So if at Ungani only ramped up to 3000 bopd net 50% at cost in AUS$ of let's say $35 per barrel and using conservative p/e of 10
    US$ POO $32 = AU$44 = profit margin $9 x 1500(net) bopd x 365days = $4.9M = $0.0144earnings /share x 10 eps multiple = $0.145 per share
    and if Ungani Far West comes in
    $9 x 2500 x 365 = $8.2M = $0.024 earn/share x 10 = $0.24 per share (where we are at today)
    then if
    US$ POO $40 = AU$56 = $21 x 1500 x 365 = $11.5M = $0.034 earn /share x 10 = $0.34 per share
    or with Ungani Far West
    = $21 x 2500 x 365 = $19.1M = $0.056 earn / share x 10 = $0.56 per share

    Assumptions being the POO, exchange rate, profit margin, cost of production, conservative p/e ratio

    It's easy to see why theoretically at full production with only one well firing, BRU is priced at the moment totally excluding any value of the tight gas discovery because they hold approx $0.08 - $0.12 per share in cash

    With Ungani shut in of course these numbers are theoretical and not actual earnings but it paints a picture as to why it would be smart to hold back production, prove up another well and wait for a better oil price.. if both happen, share price would be for north of $0.24 excluding tight gas/condensate

    Hope that helps. clearly shows that Ungani Far west is a game changer if it does come in

    Now is not the time to sell
 
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