Thanks for this information. Please everyone, ignore my last...

First 24 Last

Share
Profile

Follow
Large Portions

1,460 Posts.

495

16/04/18

15:32

Post #: 32485069
Share

Originally posted by rmkpro ↑

Page 18 of the RISC report - Appendix G of BDO Report as part of the 'Target Statement'

7.4. Operating costs

Once the Kincora gas plant has been restarted there will be an ongoing operation cost required to run the plant and associated facilities. We estimate that this will range between $9-15 million per year for such items as:

 labour, including an operating, management and maintenance team for the plant;
 chemicals and consumable materials such as oils, paint, corrosion inhibitors, glycol, etc.;  spare parts and routine maintenance;
 logistics and accommodation costs;
 head office support such as engineering, HSE, etc.; and
 overheads such as insurance, IT, fees, etc.

Costs have been delineated as either fixed or variable with variable costs adjusted on the basis of production. Approximately 60% of costs are associated with the operation of the Kincora gas plant, the balance being incurred by the PLs, roughly in proportion with production.
We estimate the cost for periodic major maintenance shutdowns at approximately $3 million per 3 to 5 years.

They put CAPEX in that at $10.4mil to bring the plant back online and corporate costs at the time were $3.4mil. So hopefully they are talking the whole of AJQ that they 'EXPECT' to be cashflow positive, not just Kincora plant in a nutshell.

Again all good as most of the extra production will fall to the bottom line earnings anyhow which is when you would think the market may finally take notice.

Expand

Thanks for this information. Please everyone, ignore my last post, I have asked Mods to delete it, at my request.

The only point I will add at this stage is Armour has already experienced and expensed cost over-run. This is not a criticism, just a fact, in what can be a costly business.

It will be terrific when we are actually Cashflow positive. But then comes the hugely expensive (jewel in our crown) development costs for FNQ / NT.

GLTH

AJQ Price at posting: 8.7¢ Sentiment: Buy Disclosure: Held
2 Upvote

0 Great analysis

Reply