re: value calauit oilfield..coaster "hi coasterin fact...

re: value calauit oilfield..coaster "hi coaster

in fact StockAnalysis did receive a fee..

still the rest stands
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tell me which oiler isn't geared towards the oil price..????

oil price is the bottom line for every oil producer around the world..

StockAnalysis uses a very CONSERVATION OIL PRICE IN CONCLUDING IT'S VALUE "$12bbl"

current oil price above US$70bbl..

regards"

Hi Sandy,

You misinterpreted my comments - I said "highly geared" not just "geared". If you examine the model you will see that the Calauit redevelopment has a fixed opex component of over $10m/month. This results in a $1 change in the price of oil resulting in a much higher % change in the value of the project compared, to say, a producer with a low opex base. I've calculated the project's breakeven price of Brent Crude to be $US48/barrel and Strachan calculate the breakeven at $US41/barrel (this is from the first paragraph of the report).

I don't believe the Strachan report is conservative in using a NPV of $12/barrel either. If you check their model assumptions on page 4 of the report you will see that they use a Brent oil price of $US70/barrel to derive this per barrel NPV figure. This is very close to the current market price and IMHO very aggressive considering they use and very low discount rate of 10% for this all equity funded project.

I also believe that Strachan uses an aggressive oil production profile for Calauit - this being 3.6m barrels of production in the first calender year of production. This is far higher than OEL disclosed itself in the presentation of the 18th of August of 2.8m barrels of oil produced in the first 12 months of production (page 15 of 26).

Coaster
Fixx.co.nz