december quarter profit

The production of the article about NZOG and the Tui / Kupe visit prompted me to complete some calculations I had been toying with.

They are perhaps not as detailed as the PPP ones I posted a week or so ago but they are along similar lines.

The article was interesting in that it confirmed that NZO thinking indicates that costs per barrel at Tui are considered as less than US$10. That is the figure I was working with on the PPP calculations I presented.

Anyway here we go:

September Quarter :
We were told that in the Sept quarter the JV shipped 2,400,000 barrels of oil.
NZOG share of that shipped production = 300,000 barrels.

I have estimated an average Gross sale price on that of US$82 for a total of US$24,600,000 Gross.
But in that Sept quarter (for various reasons) NZOG received just US$7,500,000.
That means some US$17,000,000 is owed to the Dec Quarter.

I have assumed that costs of production on that amount (@US$10/barrel)will total US$2,100,000 to give us a Nett figure of US$15,000,000 to carry into the Dec Quarter figures.

December Quarter:
By December 31 the JV reported that a grand total of 6,400,000 barrels had been produced since Tui began.

Now I have assumed that by the end of Dec. that 3 shipments (900,000 barrels) would not count for payments in Dec quarter with delay in payments and lateness in Dec of last shipments.

So assume a total of 5,500,000 shipped and paid for.
Minus the Sept total 2,400,000
Leaves a potential 3,400,000 barrels shipped and paid in Dec Quarter

NZOG share of that = 387,500 barrels
I have used US$95 average for this quarter
Now also we have to assume that with the Tapis price being above the Call rate of US$86 then some of the calls would have been activated.
I will assume as many as 100,000 have been activated. (Probably a bit high but..... )
So take 100,000 @ US$86 = US$ 8,600,000
Then the 287,500 @ US$95 = US$27,312,500
Which gives a Gross total of US$35,912,500

We can then deduct the costs at US$10 on the 387,500 barrels for a total of US$3,875,000

That will give us a Nett figure of US$32,037,500.
Now add to that the US$15,000,000 going in from the "Sept quarter" and you get a grand NETT figure of US$47,037,500 attributal to the December Quarter.

No tax will have to be paid that quarter.

There will be a liability for Royalties on production over the September and December quarters of about US$10 million approximately by my calculations at the 20% rate.
But again it may not be paid out yet.

NZOG has indicated it is paying back its loan debt on Tui of US$27m. which it can obviously have wiped out by the end of the Dec quarter if it wanted to.

So it will have quite a strong cash position showing in its Dec Quarter results at the end of next week.