Probably the biggest mistake on my last valuation calc is not forgetting about cash costs, but forgot about TAX! (given im an accountant!). :) I hate taxes as much as everyone else, always give me headache.
Now iv just put together a rough spreadsheet with revised valuation. (notice i used Net Cash Flow rather than NPV as NPV takes into account of discount rate, # of years for the project etc, which are all hard to predict). But as i mentioned earlier, although i havnt discounted the cash flows by time value of money factor, I didnt factor in the huge upward potential for oil/gas price in my valuation anyway & i think the oil/gas price potential could cover time value of money many times over, so id think the valuation is still fair or rather conservative upon drilling success.
USD Gas price 4.8 mcf Gas cash cost 1.5 mcf Oil 80 per barrel oil cash post 7 per barrel
Cost per well 1 ml Loss cfwd 2.5 ml Shares 549 ml Diluted shares 714 ml AUD/USD 0.92 tax rate 30% Well Interest 50%
Base case: Gas 24.20 bcf Oil 7.40 million
Top side Gas 40.00 bcf Oil 10.00 million
Base case: Millions Gas rev 116.16 USD less cost -36.3 USD Oil rev 592 USD less cost -51.8 USD less well cost -1 USD Well Net contribution 619.06 USD
Net contribution to VIL 309.53 USD 336.45 AUD Loss cfwd -2.50 AUD After tax 233.76 AUD
Net cash flow - undiluted 0.43 Net cash flow - diluted 0.33
Top - side
Gas rev 192 USD less cost -60 USD Oil rev 800 USD less cost -70 USD less well cost -1 USD Well Net contribution 861 USD
Net contribution to VIL 430.5 USD 467.93 AUD Loss cfwd -2.50 AUD After tax 325.80 AUD
Net cash flow - undiluted 0.59 Net cash flow - diluted 0.46
SORRY FOR THE MESSINESS :) DONT KNOW HOW TO POST SPREADSHEET, BUT U GET THE IDEA! NOW VIL, WHERE VIL YOU TAKE US?
VIL Price at posting:
3.2¢ Sentiment: Buy Disclosure: Held
