Rollacoaster as Bigstockpunter in the recent post said oil...

Rollacoaster as Bigstockpunter in the recent post said oil recovered in 25 years time is worth less than oil recovered today because of the discount factor.

You may recall that CNE has put out the following information:

"Back in the FAR Q3 2016 Report the quoted NPV per barrel according to Cairn Energy was $US6.50 @ $US50 per barrel oil @ FID and was $US12.50 @ $US70 per barrel oil @ FID.

At the Cairn Energy August 2017 presentation the quoted NPV was $US4.00 @ $US50 per barrel oil @ FID and was $US10.00 @ $US70 per barrel oil @ FID. Cairn still quote the breakeven price for production of oil at $35 per barrel in this august 2017 presentation.

However the IRR quoted by Cairn Energy has not changed significantly between their 2016 and 2017 report and was quoted at approximately 24%. This may appear inconsistent as NPV and IRR are by definition directly related based on discounted cash flow."

However this is when CNE and WPL started to move their development concept to a staged development. Thus the initial capital investment goes down, the initial returns go down, the NPV goes down a bit, but the IRR stays the same.

The latest IRR now quoted is 38% @ oil $US70 pb, and the latest NPV is still $US10 pb, so the optimisation of the development has improved the return on investment even more, and reduced the initial capital required to get to first oil.

The reduction in oil produced in phases 1 through 3 as proferred by CNE yesterday is not significant. It does not appear inconsistent with their previous 563 M barrels 2C recoverable given in the CNE August 2017 presentation, where phase 1 oil is quoted at 250 M barrels the same as yesterday's presentation. It seems the other 73 M barrels is recoverable somewhere else.

The 2 TCF of gas appears new and adds to the resource as Tones80 has said.

IMO and DYOR