Where to from here...., page-2

cont....
Assuming the POO remains at the 30/6 Q figure then the ORE produces free cash flow for the purposes mentioned of about $30mUS per anuum. I need to see the 30/9 QR to see what the result of an average POO of,say,$3 less will do for the formula so its difficult to be too certain about the ORE in the future without seeing what happenned in only the 2nd quarter in which we started to access the ORE.
Maari. Maari had a crap 30/6 quarter !
But the future is more predictable now that we have 3 key dates(more or less) available and are correct in the interpretation of the format being followed for the muli-stage "repair" work.
Item 1. Done and dusted in May- the "future proofing" of the FPSO (mooring system).
Item 2. The last remaining workover. They are /were to have started this workover at the end of August and hopefully this important (large) workover is on track to add probably-significant production,maybe before Xmas .Workovers of sandstone wells seldom fail to produce a significant recovery of the production rate from a gummed up well from just honing out the bore,apart from other things.
Item3. The water injection pipeline repairs.
As far as the format/timetable is concerned I would be surprised if the Maari production figure arent something like the following which assume that Item 2 HAS to (or is best dealt with) to be completed before Item 3.
June Q production. 9000 bopd. Badly affected by Item 1,2 and 3.
Sept Q .................... 12,000 bopd
December................13,ooo bopd
March .....................16,000 bopd
June.........................18,000 bopd.
The 3 completed "repair" jobs were anticipated to get production to near-20,000 by last June.
They may not make 20k so 18k looks reasonable based on probability of success.

Note the price Maari oil fetches over Brent- $4 to $6.
Summary. If you look at Beibu (base case 27%), the ORE magnifier to Base case(another 10% approx) and the likely bounce back of Maari production youve got be fairly happy that HZN management have probably got it the dollar numbers right and if their were to be a hiccup then IMC would likely come to the party.
The above considers production and IMC- the price deck of the the principal lenders is a hard one to quantify.