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Ann: 92 Feet of Gas Pay in Borba 1-7 Well, page-199

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wisenut

1,125 Posts.

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18/03/21

09:41

Post #: 51855127
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Originally posted by longreach: ↑

GreenOcean, a few things to consider to adjust it slightly:

1. Henry Hub price has come off its highs of a couple weeks ago. Its currently ~US$2.50/mcf. GJ has noted that California gas production generally commands ~25% premium to HH. Long term probably exchange rate $0.80 to be conservative.
2. Shares on issue. (I'm not sure what you used). Fully diluted:
SGC 643,008,426 XST 2,764,587,516

That will give you a slightly better "rough guide".

Kando is correct, that the discounted cash flow method, where you arrive at an NPV is far more accurate.
That requires a flow rate, varying (declining) over time.
Also a discount rate, that considers the future cost of money. Included also are the operating costs, and capex.

But most important for the valuation is the "recoverable gas".

But I believe your back of the envelope calculation (modified by SOI plus HH+premium) is a reasonable guide to the "potential" of Borba.
And note that the Borba "field" (covering at a minimum these top 2 zones with much cheaper, shallower wells) has the potential to move towards DougDiamonds wandering eyes to the extreme southeast figures (for 1+ tcf).

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Hi LR

$5 USD was an average price for the year latest is about $3.50 for Socal Citygate

SGC Price at posting: 9.0¢ Sentiment: Buy Disclosure: Held
2 Upvote

0 Great analysis

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