ndo npv calc, page-20

To Deswalker

I use the publicly available Galoc prodution profile in the presentations which if i do the maths right adds up to net NDO production of about 5.4MMBLS over 5 yrs or a total of about 25MMBLS for the whole asset. I use a discount rate of 10% in my example but for other stocks which are one asset companies (such as AED) i would typically use 15% discount rate. My Nido NPV calc includes head office costs and financing costs and I am using a $60/bbl received price. If i strip H/O & financing costs out i would get around US$100m for their share of the asset itself or about US$440 for the whole project 100% (which assumes 100% equity financing). If I use your $56/bbl price I still get over US$400m for whole asset. I guess it depends what opex your are assuming in your model as to why your calc is a bit lower than mine but i think we are in the same ball park.

One thing i cant remember is the crude quality premium / dicount to WTI for the Galoc crude - do you know? I don't think it is Tapis quality but i think its trades at discount to Brent which would add a few dollars difference to our received barrel prices and further explain why my NPV value is bit higher than yours.