RE: PDVSA proposes 20 Yr JV ConcessionWith a 30% royalty, the net stays in the 10 to 15% range and doesn't increase to 18% under the new system. (seemed odd that it might) A 20 year (longer or total from present date?) concession would improve the NPV calculations used in their reserve report and improve returns on invested capital. The present concession was set to expire in 2015 as I recall.
PFC is not on the list of tax scofflaws. This makes sense because it produced very little revenue since 96. Also, its operating expenses and capital credits exceeded revenues most years. Hence, it has a material unbooked tax loss carry forward.
While the final form has not been set, it appears that one can now get a better sense of the economics of the empressa mixta being proposed, based upon the investment merits and drill bit successes.
On fundamentals, these wells drill very fast through the soft sedimentary rock, they've hit pay on every well so far [even without 3D seismic], hit 50 to 77 ft of net pay in the upper carbonates in LV-9 and LV-8 [not yet tested], tested 1200 BOPD LV-7, and haven't yet penetrated the main Aqua Clara target in any well. With unspent capital from the last equity round and the 36 MM IFC loan, they have the means to exploit what is beginning to look like a great resource.