I think I understand the basics of Indonesian fiscal policy for oil companies.
1). You need to have no debt
2) once you have raised money and drill a well you can accumulate that monies back. Once you have accumulated the $2M back you can use that money and drill another well.
And repeat the process drill a well and accumulate the money back.
3) if you sit on the money and start making profits I think it is a 40% tax rate.
4) there is probably a royalty to pay per barrel of oil (sort of a tax) and if you are not making profits at the company level you would have trouble paying this. Maybe that is included in the US $20 costs.
5) if you buy into an oil field then I suspect that you have to use after tax money to pay down the purchase price. I think this is the situation up until last quarter. Earning a bit of money but getting no where but paying off the purchase to Cooper Energy.
6) I suspect that Tino is not looking to buy into an oil field but to earn his way in. That is to finance one well or a series of wells and earn increasing percentage of the whole field.
7) at this stage I will be happy if they drill another well in the local area as soon they have built the funds back up. A bigger oil production without incurring much more company over heads.
I’m happy to be corrected in any errors and we should contact Tino for information on uncertain facts. This could be a great growth story and as shareholders we should understand the growth plan.
Saltbus
BAS Price at posting:
0.3¢ Sentiment: Buy Disclosure: Held
