The IRR or ROI doesn't mean squat.
The amount of net profit per barrel times the number of barrels needed to accumulate the needed funds for Phase Two is the key number.
How much is Denbury putting into phase one of the project in terms of equipment and construction as well as cost of their capital?
What is the transport cost per barrel?
How much is the royalty and tax per barrel?
How much CO2 will be purchased before any oil is produced?
No matter how much you like the project, the facts of the matter are that Denbury will get paid first, ELK needs to come up the funds for Phase two, and it is a long way to go from A to Z.
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Ann: Notice of General Meeting/Proxy Form , page-18
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