To double or triple in Jan 2011. One must assume that he thought TRACS or the other independent company who were originally doing it would validate the 250mmbls scenario when he said that. So if we now go to 2012 and the end of the EWT which put XEL in a position to get that figure, we should be a month away from that RNS otherwise what he said had no bearing on reality and was purely said for PR purposes. I am giving him the benefit of the doubt here and believing him. My only worry is the length of the loan it makes me think that XEL have a long way to go still in negotiations
The tax allowance applies to the supplementary charge tax at 32% and we have an allowance of £800 million which can reduce our tax liability by up to £256 million. (spread over a 5 year period, ie £51.2 million per year)
Does the taxable allowance apply to profit or revenue generated ? If they generated $50 million in revenue and made $1 million in profit, does that leave them $750 million, or does it leave them $799 million in allowable relief ?
Devil in the detail - the bod will be looking to max the farm-out deal to cover back costs. $300m RBL is small beer on a multi billion dollar field - but they will keep the debt and offset against tax.
XEL will repay debt and invest in development of the field to reduce the tax liability - only showing a small profit to keep investors happy. As they have tax breaks of $800m I doubt they will pay any tax for years.
The asset is reduced when 50% of the field is drained - correct but XEL will be cash rich and investing in other assets. That's what makes the share holders happy and that's why all majors need new assets - not cash in the bank.
Right, where is the repayment of debt, the cost of financing, G&A and other non cash items such as depletion as the reserves are drained ? Even so, your numbers show the cash flow from 35 years. Divide it by 35 years. It would take that long to confirm. Remember, earnings are reduced unless replacement production is added. If you begin with 250 million barrels as assets, the asset value is reduced by 50% when half the field is drained.
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