Ann: Corporate Presentation, page-4

Strange that previous statement on September lifting seems to have been incorrect:

“MT Marlin Ametrine lifted 60,275 bbls...The realised price for the cargo after shipping costs was US$2.83 million or ~US$46.90/barrel. ”

Now revised:

▪ Crude is sold FOB Wyndham
▪ Trafigura is responsible for all shipping related charges to the relevant refinery. ▪ September lifting was for 60,275 barrels
▪ Realised price for the cargo after shipping costs was US$2.96 million or. ~US$49/barrel.

- in fact it’s $49.10 to be precise, so the discount to Brent, which was around US$53, give or take 10c is about US$4. It’s a contract, it’s probably a round number, like US$4.00 exactly.

Here are revised numbers from previous post which used US$6 discount previously stated by BRU, which now appears incorrect. Jophda, was it you who mentioned there may be other per barrel deductions like a royalty payment? I’m not familiar with the terms of that, but assuming you are correct, you may easily refine the calculation below further - the key point is to deduct all per barrel items from the only hard and fast piece of information BRU have provided in relation to the 1250bopd statement and their estimated operating profit to deduce the fixed (ie not per barrel) production costs, (or operating field costs, if you prefer that term) - as long as you remember to then deduct all the per barrel costs you have used from your future projection calculations...

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A$25-30 margin at US$50 Brent at 0.75c exchange rate is only applicable to initial start up 1250bopd as company stated on most recent 13/9 presentation:

 At production rate of 1,250 bopd, export system established through Wyndham Port provides operating margin of up to A$25 to A$30 per barrel at US$50 Brent oil price and 0.75 A$/US$ exchange rate


The correct methodology is as follows:

Above was based on A$66.66/bbl. First deduct A$10/bbl trucking costs. Then deduct US$4=A$5.33/bbl FOB Wyndham contract discount to Brent. From remaining A$51.33, A$25-30 is operating margin, so the fixed operating field costs over 1250bopd are the equivalent of A$21.33 to A$26.33/bbl

Over 1500bopd, these are therefore A$17.77 to $A21.94/bbl (ie spreading above over 1500bopd instead of 1250bopd)

Current Brent price is US$60.58 at 0.7677 = A$78.91/bbl (Friday’s close)

Deduct A$10/bbl trucking then deduct US$4/bbl Brent discount, now A$5.21/bbl = A$63.70/bbl. then deduct A$17.77 to $A21.94/bbl operating field costs.

Operating margin at 1500bopd is therefore A$45.93 to A$41.76/bbl

Then multiply by 1500bopd for number of production days per year. (doing it this way first removes this uncertainty from the equation, 2 or 3 weeks shut-in should probably be factored in though)

To make further projections:
- to get production costs for 3000bopd, just halve the above for 1500bopd, so half of A$17.77 to $A21.94/bbl ... A$8.88 to A$10.97
- to get production costs for 5000bopd, just divide by four the above for 1250bopd, so A$5.33 to A$6.58/bbl divided by four...
- naturally the fixed production costs must increase marginally at these levels, so add a bit on if you are uncomfortable with concept of 5 or 6 bucks per barrel, that sounds too good to be true...
- don’t worry about deducting A$10 at whatever point export through Broome commences (Wyndham contract has 14m left)
- however you look at it and whatever margins of error you feel the need to add in, this is a very compelling proposition.