OTCPK:WSRLF - Post by User
Comment by
canadafoxon Nov 20, 2014 8:30am
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Post# 23146944
RE:RE:RE:Averaged down
RE:RE:RE:Averaged downN; The more up-to-date financial analysts' material is provided at $80 pb. S-1 will not produce at 11.5K bpd as headline figures are usually impacted by reservoir management and operational issues. However, there is no water and minimal H2S production and it seems to be an excellent producer from previous production records. If we assume 10K bpd that would not be far wrong IMO.
It can be misleading to compare returns with NA wells as WZR operate under a PSC licence regime and with conventional reservoirs and in a 'difficult' geo-political environment. We should however be seeing high initial cash returns because of the Cost + Profit oil component of the licence terms and the Garmian high production rate. If we assume a minimum of 10K bpd and a $80 OP then we should see around $19 - $20 pb initially ( see link ) and $200K approx. income ( if payments made ). Pro rata for above/below that rate.
These calculations are just the nominal figures and valuations from them need to take account of reserves & resources, CAPEX, financial position, risks, DCF etc etc. Not my area particualrly but you can work them up I am sure.
Here is the PSC calculation to allow basic checking and further work...
https://www.westernzagros.com/ouroperations/production-sharing-contracts/fiscal-terms/