Ann: Juanita Well Operations Update, page-57

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TripleCheese

33 Posts.

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02/02/23

22:52

Post #: 66042799
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Originally posted by danpech: ↑

Funny that, always thought NPV is a measure of cumulated future cash flows. Just because the BRK business model is more about selling reserves rather than producing them, they still derive production revenue when they HBP drill . This results in an added part of their business model, which is to build a portfolio of low decline producers giving them an annuity type income stream from production……and they intend to build up and produce the heck out of the Bradbury AOI which should add material production to the SWISH wells already drilled ( which almost certainly will be retained)

So I disagree that we should ignore the EBITA methodology for as being relevant to BRK. They will always produce because they drill their DSU’s they want to sell to HBP status. This” accidental “cash flow will be a feature of BRK going forward, has value and shouldn’t be ignored as a tool in assessing BRK.

Having said that, I do agree the NPV is a better measure of value and EBITDA more of a measure of ability to generate cash which in BRK’s case will be very lumpy as cash flow will fluctuate between production and infrequent but significant asset sales.

Thanks for posting.

Cheers

Dan

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All I'm saying is if you're going to divide price by something to value the business, that something better be a decent approximation of long term future cashflows. TTM EPS and EBITDA for BRK is not that. You know it!

BRK Price at posting: 1.2¢ Sentiment: Buy Disclosure: Held
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