RE:RE:RE:RE:Considering netbacks are only approx $20 dollars a barrel on I'm no O&G accountant - what is the difference between "funds flow from operations" and "cashflow from operations"? I see in Q2 "funds flow" was twice what "cashflow" was. Also I note cashflow for Q2 was 16MM and for Q1 on similar production numbers it was $51MM, so whatever happened there would appear to have changed the netback between quarters by a factor of 3.
Fund flow from operation refer to the Cash flow from operation before any fluctuation due to the non-cash working capital items, here's a reconciliation :
Q1 :
CF from operation : 51,900 $
Changes in non-cash working cap (Note 18):
A/R : -16,392 $
Prepaid : -299 $
Inventory : 326 $
A/P : 470 $
Funds flow from operation : 36,005 $
Production average : 18.007 bopd (1.643.138 barrels)
Netbacks (after tax) per barrels : 21.91 $
The same thing can be done in Q2 :
CF from operation : 16.347 $
Changes in non-cash working cap (Note 18):
A/R : 17692 $
Prepaid : 285 $
Inventory : -326 $
A/P : -1,111 $
Funds flow from operation : 32.887 $
Production average : 18.417 bopd (1.680.551barrels)
Netbacks (after tax) per barrels : 19.57 $
Here. I hope it solves it.
As for my opinion on the matter, i think it's best to calculate netbacks based on CF before any non-cash working cap fluctuation like i did above because i found that movement in non-cash working cap are more "accounting team" efficiency than operation efficency but one could argue otherwise.
And usually, i don't also take the "income tax paid" cause the moment it is paid is often not related to the production of the quarter so i usually apply a % based on the country tax rate if i want an after tax netbacks...
Later
white