I think we can see that this rig purchase provides a high degree of flexibility and control for NGE with their planned drill program and the numbers also demonstrate why this may be an attractive stand alone business in itself.
1. Assuming this rig will be purchased on a 50/50 cash basis with the JV partner i.e. US$3.55m each.
2. Of the minimum 12 holes planned in the Western Province 3 will be NGE's and 9 will be on leases held by outside parties.
3. Informed sources suggest average hire revenue per hole is approx US$4m thus 9 X US$4m = US$36m revenue X 50% = US$18m less costs. Most costs passed on to end user (heli lift transport etc)
4. This stacks up pretty well for a US$3.55m investment.
Regards
Pihrana
NGE Price at posting:
17.0¢ Sentiment: None Disclosure: Held
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