@plough,
At IP24Hr of 98 bopd based on the decline curve eshttp://hotcopper.com.au/threads/ann-chairman-ceo-agm-address.3056747/#post-20770871timate, 7 months of cumulative production = 14,265 gross barrels of oil.
Assuming NO ROYALTIES, LOE of $3,000/Mth and 2.5% production tax based on $38 Sales Price (assuming $7 discount to WTI currently at ~$45)
Gross Revenue = $38/Bbl x 14,265 Bbls = $542K
Cash Expenses = $3,000/mth x 7 mths + 2.5% x $542K = $34.5K
Cash on Cash Return shows payback in 7 months.
That's how I think the numbers are derived. If you follow that you know exactly what is wrong with it. Voodoo Economics!
The gem for me was the reference to EFS and spending $10M to get IP24H of 1,000 BOE and thus the extension that the cost was $10,000 per flowing BOE. No mention that was some 3 years ago with oil over $100/Bbl and costs much higher. The comparison to now when costs are much lower and price of oil much lower and how this is halved to $5,000 per flowing Bbl. I think I posted a similar concept - might have even used an old "favorite" poster's favorite Permian area to compare current costs per development Boe.
I am not an irrationally cynical person ... just thorough and there are plenty of gaps here for rational and irrational commentary.
Did anyone actually go to the AGM???
