smith#1 calculations

The size of the Smith#1 find is still not known but from Peter Landau's comments in the Australian Investor (http://australianinvestor.com.au/magazine.aspx?id=3205) at least some calculations can be made.

"targeted production range of between 500 and 1000 barrels of oil as well as 8 to 12 million cubic feet of gas per day"

$5.749 at MMbtu
$75 per bopd
These calculations are gross of tax, ongoing operational costs and other onstream costs to get oil and gas to market.

High end = US$13.1m per year
Middle of range = US$10.4m per year
Low end = US$7.6m per year

Calculations

High end of the range
12MMcf (12000 MMBtu) = $68988 per day
1000 bopod = $75000
Total = $143988
Range interest (25%) = $35997 per day
(x365 = $13.1m per year)

Middle of range
10MMcf (10000 MMBtu) = $57490 per day
750 bopd = $56250 per day
Total = $113740
Range interest (25%) = $28435 per day
(x365 = $10.4m per year)

Low end of range
8MMcf (8000 MMBtu) = $45992 per day
500 bopd = 37500
Total = $83492
Range (25%) = $20873
(x365 = $7.6m per year)

Range losses last year were AUD$4.4mil (about $4m US). Those losses will be turned around by Smith#1 which is not bad for the farm in costs of just over AUD$1. Once the rights issue is underwritten there will be AUD$9m in the war chest. Lot's of money swishing around to go after the main prize.

My boots are filled so I've changed by position to LT Sell.