In the FY20 First HalfResults announcement of 24 Feb 2020,...

In the FY20 First HalfResults announcement of 24 Feb 2020, Managing Director David Maxwell stated “Plant design rates of 68 terajoules per day would see our total daily production lift to approximately 5 times current levels”.

At the time he stated this, for the immediate preceding quarter (or at the end of the preceding quarter where relevant – market cap (“MC”) & share price(“SP”)):

· Production levels were 0.27 mmboe (implying that plant design of 68 TJ/day would equate to 1.35 mmboe per quarter);

· MC was M$964.6;

· SP was $0.593;

· The ratio of M$ MC to Production Levels was 3,572.6 : 1

The following table captures relevant data:

With Orbost producing at 68 TJ/day (i.e. COE production levels at 1.35 mmboe per quarter), using the Dec 19 ratio for M$ MC / mmboe would give a MC of $4.82 billion, with a SP of $2.965:

This seems a little optimistic to me, so using the lowest M$ MC / mmboe ratio from the initial table (i.e. Mar-18 – 1,523.45), gives a MC of $2.06 billion, with a SP of $1.264:

A third option I’ve done is using the average of calendar year 2018 (i.e. 1,881.66), giving a MC of $2.54 billion, with a SP of $1.562:

...to be continued in next post...