Hi all,
Probably the biggest mistake on my last valuation calc is not forgetting about cash costs, but forgot about TAX! (given im an accountant!). :) I hate taxes as much as everyone else, always give me headache.
Now iv just put together a rough spreadsheet with revised valuation. (notice i used Net Cash Flow rather than NPV as NPV takes into account of discount rate, # of years for the project etc, which are all hard to predict). But as i mentioned earlier, although i havnt discounted the cash flows by time value of money factor, I didnt factor in the huge upward potential for oil/gas price in my valuation anyway & i think the oil/gas price potential could cover time value of money many times over, so id think the valuation is still fair or rather conservative upon drilling success.
USD
Gas price 4.8 mcf
Gas cash cost 1.5 mcf
Oil 80 per barrel
oil cash post 7 per barrel
Cost per well 1 ml
Loss cfwd 2.5 ml
Shares 549 ml
Diluted shares 714 ml
AUD/USD 0.92
tax rate 30%
Well Interest 50%
Base case:
Gas 24.20 bcf
Oil 7.40 million
Top side
Gas 40.00 bcf
Oil 10.00 million
Base case:
Millions
Gas rev 116.16 USD
less cost -36.3 USD
Oil rev 592 USD
less cost -51.8 USD
less well cost -1 USD
Well Net contribution 619.06 USD
Net contribution to VIL 309.53 USD
336.45 AUD
Loss cfwd -2.50 AUD
After tax 233.76 AUD
Net cash flow - undiluted 0.43
Net cash flow - diluted 0.33
Top - side
Gas rev 192 USD
less cost -60 USD
Oil rev 800 USD
less cost -70 USD
less well cost -1 USD
Well Net contribution 861 USD
Net contribution to VIL 430.5 USD
467.93 AUD
Loss cfwd -2.50 AUD
After tax 325.80 AUD
Net cash flow - undiluted 0.59
Net cash flow - diluted 0.46
SORRY FOR THE MESSINESS :) DONT KNOW HOW TO POST SPREADSHEET, BUT U GET THE IDEA! NOW VIL, WHERE VIL YOU TAKE US?
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- now revised valuation with cost & tax! :)
now revised valuation with cost & tax! :)
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