WISR Ltd V.WZR

RE:RE:RE:RE:RE:March-April a turning point for WZR

[TangoPrince]

CF:  Yes, thank you.  I’ve corrected the error below.  But even with this change the company still generates $27 million in annual cash flow for each 5000 bpd produced, or a total of $108 mil in run-rate cash flow from the two existing wells at Hazira and Sarqala if all goes as planned.  The company is targeting 10k bpd from Sarqala after the workover and 10k bpd at Hazira for a total of 20k bpd (4 x 5000 bpd x $27 million per 5000 bpd = $108 million).  If the two wells produce only 15k bpd between them, that would still mean $81 million in run-rate annual cash flow (3 x $27 million), which is still a very big deal.  Furthermore, if the oil at Hazira is similar in composition to the oil at Sarqala, these wells could both be online by June.

Gross annual sales on a run-rate basis:
5000 bpd x 365 days x $85 per barrel = $155.1 mil

Calculation of percentage to contractors as a group:
90% of $155.1 mil = $139.6 mil    (to account for the 10% royalty to KRG)
45% of $139.6 mil = $62.8 mil      (goes to contractors as "cost recovery oil")
35% of 55% of $139.6 mil = $26.9 mil      (to account for the 35/65 split of profit oil between contractors/KRG while R factor<1)

Profit oil to contractors for each 5000 bpd produced:
$62.8 mil + $26.9 mil = $89.7 mil annual run-rate  (while cost-recovery is in place)

WZR portion of profit oil:
40% x $89.7 mil = $35.9 mil annual run-rate to WZR
 
Total well operating costs (not including corporate overhead, depreciation or depletion):
5000 bpd x 365 days x $12 per barrel = $21.9 million  (this comes from an analyst covering WZR)
 
WZR share of the above operating costs:
$21.9 mil x 40% = $8.8 million
 
WZR annual run-rate cash flow for EACH 5000 bpd produced WHILE cost recovery is still 45% AND the R factor <1:
$35.9 mil - $8.8 mil = $27.1 mil
 
So, if Sarqala and Hazira produce 20k bpd combined, the company will have 4 x $27 mil = $108 mil in run-rate cash flow per year.