value of trinidad

Some thoughts on the current value of Trinidad, before we receive the new and enhanced reserves report. This is just opinion.

P1 reserves (90% chance of being achieved or bettered) = 2.6mb x 90% = 2.34mb.

P2 reserves (50%) = 2.2mb x 50% = 1.1mb

P3 reserves (10%) = 2.1mb x 10% = 0.21mb

Total 3P(P1+P2+P3) reserves = 3.65mb

3.65mb x $25 free cash flow/b = $91.25m

Undeveloped prospective reserves = 20mb

20mb x $5 = $100m

Total = $191.25m

Even if you took an extremely conservative view and valued the 20mb undeveloped prospective reserves at $2.5/b it still gives a total of $141.25m.

We will soon be receiving an update which will increase the P1 and P2 reserves, which on an asset valuation receive the highest weighting. This will increase due to the success of the step-out wells and the engineering analysis by Forrest A.Garb. This concluded that significant volumes of crude remain in the beach Marcelle field that can be produced using standard secondary recovery techniques such as water flooding. The revised reserves report (after re-analysis of seismics)will also include Herrera formation potential.