cinguetti reserves, page-12

Hi DF

Maybe I haven't answered all your questions

"I'd like to know what cash flow is
1. during the cost recovery period,
2. what it is after the cost recovery period and
3. how long the cost recovery period is...."

IMHO :)

1. The cash flow will be US$140m in 2006 and at least $220m in 2007. This is my interpretation of the cost recovery period.
2. After that it depends on the reduced rates from Chinguetti (or possible augmentation by further development) and how much HDR get for the oil. They will be paying GoM tax at 25%. I am assuming they pay tax based on contribution rather than sales value but I may be wrong.
3. The cost recovery period will be 2006 and part (most) of calander 2007 according to my reading of the Euroz report.

I have cash flow figures for the 9 years based on a realisation of US45/bbl and a well depletion rate of 82.45%pa. NPV under these conditions is A$1.12/share but I think they will get more than US$45/bbl and like Hardmano I think they will do more development work.

I have a document which explains Cost Oil and Profit Oil but I am still struggling to understand it.

regards

Complex