Cairn Tweets- Stenna Drill Max, page-69

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Tony999

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27/11/16

09:54

Post #: 20915024
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Originally posted by Ya ↑

Re: Senegal and their 70% claim- in the video, do they state which part of the value stream that claim is assigned ?

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It's the profit oil share component that the Minister has referred to during last week's MSGB Conference.

So essentially in Senegal, an Operator can claim 75% of its costs capped per year from the revenue, termed as Cost Recovery. Think Indonesia gave away 80% to an Operator when the PSC's were rolled out ages ago. There r no royalties here.

- Apply a 5 yr straight line depreciation to recoup costs incurred by the JV (eg 3bil/5=600mil/yr)

- The difference is called 'Profit Oil'

- This profit component is then split betwn JV & State based on production range from the oilfield
(eg 60-90k bopd is 50-50 split, 90-120k bopd is split 54% to state & 46 % to JV, 120k+ bopd is 58:42 split)

- The JV profit share is then taxed at 25%

- this tax is added to the State's revenue share.

- Thus arriving at a final figure of shared profit. (xx% JV, xx% State).

Besides this, there r Bonuses as in upfront USD5-10mil or on DOC or fitst oil or 50-100th mil bbls produced etc. etc. That's about as easy as I can explain.

Not sure why FAR cant add a simple slide to explain the $/bbl revenue split to the end result. KOS released the above PSC terms in its qtrly SEC filings in Nov 2014, so dont understand the secret stance.

The oil discovery is Senegal's asset so the profit Oil share, bonus & tax provides a much values stream of cashflow to their coffers & gets trickled into save the pelican/elephant, build a road or light a village type of schemes by their Finance ministry. Most of the monies r traceable at times (and sometimes not, its Africa afterall). Am not holding now, might buy closer to spud.
Have a good festive season all.

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All I noticed in this post is that YA bailed.

I wonder how many other prominent posters have quietly bailed?

FAR Price at posting: 6.9¢ Sentiment: Buy Disclosure: Held
11 Upvote

0 Great analysis

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Cairn Tweets- Stenna Drill Max, page-69

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