A gas sales price of $11-13 is optimistic given the henry hub price is currently $9.15 ish AND the processing plant charge a fee for the gathering/processing per unit. AKK are only currently able to utilise 2.5 mmcfd capacity GROSS so @ 65% NRI they have 1.625 mmcfd available for themselves (and NRI is reduced at the end of the year).
Even if they average $9 mcfd (allowing for seasonal fluctuations even this is historically very high)and produce at mamimum rates for a year with 90% downtime then 1.625*9000*.65*365 comes to US$3.2M net to AKK utilising the current plant. i.e IMO managements figures are very misleading. Also remember they based all their planning etc on a realised gas sales price of $4 mcfd - refer previous company announcements - so they have 'got lucky' with the gas price, if it was back at $4 then it wouldn't be pretty.
Don't take all figures/announcement AKK release as gospel.. they have proven to be 'wayward' on more than one occasion.
DYOR - will state 'no sentiment' for now
AKK Price at posting:
0.0¢ Sentiment: None Disclosure: Held
