Wheres Dwuu and Adriano, page-11

Adriano old buddy, have we not learned from MAD whose Reserves (and I mean 1P) were ridiculous in size to ability to develop. No need to go further and add 2P/3P.

Isn't looking at 3P then more of the same concern? There is no $400M of "value". The value lies somewhere between $22M - $65M with some bonus for the 2P


I just don't get it with how misunderstood these reports can get. A Reserves report helps establish the Net Asset Value (NAV).

A NAV model assumes that the company never increases its existing reserves, so only the future Capital required that which is necessary to develop the existing reserves. Effectively this is trying to estimate how much profit can be generated between now and when reserves are depleted, assuming no future re‐investment to find or acquire new reserves.

Because the NAV is done at the Asset level and not the Corporate level (so different to DCF) ONLY production related expenses are included (so not General & Admin costs for example). In other words what is the value of Birch OUTSIDE of AKK (as in what might someone pay for it).

I'll put up an estimation of an adjusted NAV model for Birch in a separate thread for comment.