revenue calculations, page-4

Hi Barley..!!

Dealing with the gas only:-

C-1 = 1.7mmcuft/d @ 23.5% interest = .4 mmcuft/d

H-1 = 1.1mmcuft/d
S-2 = .9mmcuft/d

Total = 2 mmcuft/d @ av 71% = 1.5 mmcuft/d

Therefore AZZ's share in total = 1.9 mmcuft/d

Tuesdays gas price was US $ 6.03 = AUD $ 7.53 per,mcuft

On 1.9 mmcuft/d their share = AUD $14,307 per day
On 365 days ..= AUD $ 5,222,055

That's cash in their front door..!! For south Texas wells, accountants are using a rule of thumb figure of 37% of turnover as a NPAT factor.,,, after taking into account-------Wellhead discount, Landowner royalty, Cash Opex, Amortized capex ,State and federal taxes..!!

So if we go with the accountants then the nett profit from those figures is AUD $ 1,932,160, per year..!!

Depletion :- As another rule of thumb, for south Texas wells, they allow for a two year ramp up of production ,,, to a rate of 30% of the expected resource level and then a progressive decline of 35% per year, which enables an 85% of resource depletion over 5 years, and complete depletion over 10 years..!!

It should be said that i would expect those production rates on H-1 and S-2 to increase over the next two months..!!

Cheers Mate..!!