TSXV:CVI.P - Post by User
Post by
easyoilon Jul 04, 2012 11:12am
350 Views
Post# 20081061
Drilling has begun again - very good news
Drilling has begun again - very good news
Drilling has begun again - very good news
The cash flow impact from the Ras Nowmah-5 well and the Ras Nowmah-4 wells could be significant if the wells comes in. When they first tested the Rash Nowmah-2 well it tested 3000 bopd of 29 API oil, the well is still producing slightly more than 2000 bopd. The potential first year cash flow from one of these wells if they are coming in at the same rate as Ras Nowmah-2 would be $13.3m net to Calvalley. Based on the following assumptions:
2000 bopd gross production year 1
38.5% royalty rate
$100 brent oil price
28% tax rate
$8/bbl in production cost
In the best scenario Calvalley could get additional cash flow of $26.6m if both Ras Nowmah-4 & 5 wells are successful. With the current mcap of $133m and enterprise value of $54m this could clearly take the share price back to $1.70-1.80 level.
If the Chinese rig operator has been able to bring in the rig and people to the block I would think Calvalley should also have better odds of being able to bring back the shut-in production over the next few months.