"Low Case Using a cash flow valuation assuming gas is extracted at a rate of 200 PJ per annum based on 80 operating production wells at 2.5 PJ per annum, then on an annualised ?profit? basis a project based on this ?Andado Shelf? deposit would generate profits of $300 million per annum based on producing gas at $2/Gj and selling it at $3.50/Gj. Using these assumptions and a project life of 10 years, the NPV would be $2.06 billion. However, the minimum size deposit contemplated here could support a project of that scale for 40 years.
Mid Case If a value is assigned based on a gross profit margin of $1.50/Gj extractible then the larger target deposit on the Andado shelf would be worth $109 billion or 7.3 billion in situ tonnes at $14/tonne or 3.65 billion ?extractible? at $28/tonne. If a multiple seam extraction method can be perfected these numbers would double or triple. Using a single seam assumptions and timeframe of 10 years as in the low case, the NPV would be $18.78 billion.
High Case If this same methodology is applied to Maynards exploration target of 380 billion tonnes of coal greater than 5 m thick and less than 1000 m depth, discounting the coal by 70% to limit target seams to those greater than 10 metres thick and to account for extraction methods and then applying a 50% bulk extraction efficiency, what?s left is an extractible ?tonnage? of 57 billion tonnes or (assuming 20Gj/tonne) 1,140,000 PJ. At $1.50 gross profit per Gj that?s a valuation $1.7 trillion of in-the-ground value, with a NPV of $293.35 billion using the same assumptions as the previous cases. Again, these figures could easily double with multiple seam extraction."
CTP Price at posting:
28.5¢ Sentiment: Buy Disclosure: Held
