Ive based these calculations this quote from Landau in the The Australian Investor mag back in early Jan - "targeted production range of between 500 and 1000 barrels of oil as well as 8 to 12 million cubic feet of gas per day". Calculations are gross of tax, ongoing operational costs and other onstream costs to get oil and gas to market and they obviously eat into the figures as well.
$5.749 at MMbtu $75 per bopd
I've made calculation for 3 ranges with the 8-12Mcf/500/100bopd - High (12Mcf/1000bopd), Medium (10Mcf/750bopd) and low (8Mcf/500bopd).
I've taken away $3.7m from each of the ranges which is an estimate of the current cash burn rate based on the last published figures. So these figures estimate positive cash flow on Ranges books per year from one well. Smith#2/#3/#4 will be cash straight onto the books without this deduction.
****Revenue Calculations for Smith#1 find****** High end = $9.4m ($13.1m smith oil and gas income per year minus $3.7) Middle = $6.7m ($10.4 smith oil and gas income per year minus $3.7) Low end = $3.9m ($7.6m smith oil and gas income per year minus $3.7m)
High end of the range 12MMcf (12000 MMBtu) = $68988 per day 1000 bopod = $75000 Total = $143988 Range interest (25%) = $35997 per day (x365 = $13.1m per year)
Middle of range 10MMcf (10000 MMBtu) = $57490 per day 750 bopd = $56250 per day Total = $113740 Range interest (25%) = $28435 per day (x365 = $10.4m per year)
Low end of range 8MMcf (8000 MMBtu) = $45992 per day 500 bopd = 37500 Total = $83492 Range (25%) = $20873 (x365 = $7.6m per year)
Draw your own conclusions and question all of the above (DYOR yada yada). IMO Smith will give a floor above where we are now but will not release much *value* to shareholders. Smith will keep the company afloat, focused on the main prize and away from the temptation to dilute further. Without a big Sp increase it's still and excellent little base to work up from.
RRS Price at posting:
5.2¢ Sentiment: LT Sell Disclosure: Held
