RE:RE:RE:RE:RE:2.00 Per Share Buyout?At first I thought that the royalty was going to quadruple by NWX's fiscal 2016 as I read in one of the Beach/Drillsearch presentations that they were going to increase the capacity of their Bauer oil facility to 50,000 barrels by June 2015. Since they also show about 10,000 bopd production from PEL 91 presently, and there are repeated statements regarding the Bauer oil pipeline being maxxed out, with other production being trucked to storage/processing, one could safely assume a quadrupling, right?
Well, I saw another presentation today stating that they were going to increase capacity from 33,000 barrels of water and oil to 50,000 barrels. So the pipeline capacity presently appears to be taken up by a large amount of water. Increasing from 33k to 50k is only a 50% increase, so now that would change the cash flow to $18m per year assuming oil pricing and exchange rates remain the same. A NPV calculation with an 8% discount in Excel gives $1.55 per share for 12 years and $2.06 per share for 20 years.
I've spent a considerable amount of time on this reviewing Beach/Drillsearch presentations and press releases and this is what I came up with. I'm not as clear on the other permits and their status, but it looks like PEL's with natural gas aren't producing yet.
I'm assuming 2014 $12m/2015 12m/2016 $18m and onward in my royalty assumptions for the NPV calculation.