Extract from 2014 Financial Statements: Note 7: The recoverable...

Extract from 2014 Financial Statements: Note 7:

The recoverable amount of the Manora development asset of $134.4 million (2013: $86.4 million)
has been determined based on a fair value model using cash flow projections from financial
budgets covering a eleven-year period. As a result of the current declining oil prices, recoverable
amount of $134.4 million for Manora resulted in an impairment loss of $15.1 million being
recognised for the year.
The following assumptions were used in the assessment of the recoverable amount:
 Discount rate – pre-tax discount rate of 12.5% (2013: 12.5%) has been applied to the cash
flow projections;
 Inflation rate – Thailand inflation rate of 2% (2013: 1.5%) has been applied to the cash flow
projections;
 Oil price – the oil price applied to the cash flow projections is based on the average of the
Brent forward and economic consensus price at the date of assessment for 5 years then
reverting to long term US$80/bbl.
Sensitivity analysis
It is estimated that changes in the key assumptions would have resulted in the following additional
impairment at year end:
2014
$’000
Discount rate: 1% increase 1,625
Inflation rate: 1% increase 925​

Long term oil price reduction of US$5/bbl (real) 1,125

Source:
http://www.tapoil.com.au/IRM/Company/ShowPage.aspx/PDFs/2021-10000000/2014FullYearFinancialResults

Manora has 6.1 mmbbls net 2P Reserves and 3.2 mmbbls net 2C Resource. I do not know if the cash flow analysis referred to above refers to only the 2P Reserves (I suspect this is the case) or both the 2P and 2C.

http://www.tapoil.com.au/IRM/Compan...670/MajorManoraMilestone2PReservesBookedbyTap

Regards

SP​