What I do understand about FW is it’s API 41.6 specific gravity and anything between 40 and 45 is the most expensive premium light sweet crude out there. OK, so you can’t quite fuel the space shuttle with it, but I idly wonder what kind of budget would be sufficient to refine it into something near diesel virtually on site and a) sell directly into the WA market and b) fuel our own quad trucks!
So, previous calculation was:
BRU preso states A$25-30/b profit margin at 1250bopd when Brent is US$50@75c = A$66.66/b
US$6/A$8 is the FOB Wyndham discount so operating production costs are A$28.66 to A$23.66/b ... which at 1250bopd over a year is A$13m to $A10.8m pa. (Using 365 days production for sake of example)
At A$89.80 (ie A$82 after deducting FOB Wyndham $7.80 @ US$6@77c, trying to use round numbers for sake of example) at @3000bopd, annual revenue is A$89.79m
So now we have:
A$40/b profit at 2000bopd when Brent is US$60@75c = A$80/b
US$6/A$8 is the FOB Wyndham discount so operating production costs have increased to A$32/b ... which at 2000bopd over a year is A$23.36m (Using 365 days production for sake of example)
At A$89.80 (ie A$82 after deducting FOB Wyndham $7.80 @ US$6@77c) at @3000bopd, annual revenue is A$89.79m. Less $23.36m is A$66.43m profit.
This is actually a revision down on my previous calculations, but based on more up to date info, it’s hopefully more accurate. It seems to me operating costs using the original 1250bopd were an underestimate or the economies of scale are not quite as good as indicated. So I would suggest we probably need to assume producing 3000bopd would see operating costs above $23.36m and therefore need to take a bit more of this profit calculation, do let’s call it A$60m. Current market cap is $130m, so I think we’ll be right.
