The PSA is not based on revenue - it is based on profit. The first tranche of gas is applied to expensess. The second trache is applied to capex. What is left is then divided amongst the contractors and the state (vis royalty and tax). The important point is that it is PROFIT that is split - not revenue and the split includes the BOTH the royalty and the income tax.
Although the standard indonesian PSA is now 80:20 (80% to the state), the ewc psa predated these and I am pretty sure is 60:40 in favour of the company (i need to confirm this - but am 95% sure.
The psa, compared to subsequent psa for other blocks, is hugely favourable to the company. I worry that the indonesians are looking to 2022 for the reset...
EWC Price at posting:
51.5¢ Sentiment: LT Buy Disclosure: Held
