tulsa

Hi

A while back I posted a valuation of RFE based on EBITDA multiples and have this afternoon revisted the same and in light of the Stewed Dudes rabid bagging of RFE have come at it from a different angle - the old NPV, IRR, non discounted payback and project ROI calculation. Indicative valuations based on EBITDA multiples can be derived thereafter.

I'm going to go at each project seperately and then consolidate at the end - Tulsa tonight.

Due to the fact that "I know boats" and swimmy things and not necessarily oils I'm fine to have the following criticised and am happy to change.

Tulsa

assumptions

well cost $250K ea but say $300K
oil flow rate 86bbl/day but say 60
oil production cost $USD2.50 but say $5.00
gas flow rate 50 MMBtu/day
gas production cost $USD1.88 per MMBtu
decline rate - unsure but say straight line @ 17.5% pa
total wells - 20 by end of fy 09/10 and no more

5 year average oil price $USD71 / bbl
5 year average gas price $USD5 / MMBtu
exchange rate AUD$1 = USD$0.813
NPV discount factor 12%
Tax rate 30%

Model results for Tulsa given above assumptions

IRR - 319%
NPV - $52.7 million
Non discounted payback 0.33 years
ROI after tax - 335%

EBIT 10/11 $29.8 million or ~22.2c per share post cap raising.

Seems reasonable bearing in mind Tulsa is a bonus.

EOK next - anyone care to esitimate a well development program post this calendar year.

All IMO

Cheers