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Nothing wrong with qualifying out our concerns and ensuring that our understanding is correct on many fronts. What's wrong with giving the real detail on A5 and A8 ? Oil flowing to the surface but not at previous levels ? We're the mushrooms again, having to translate the crap info. No different to the 1500 bopd statement when A5 was flowing for x days. Needs to advise the market as to the true position, A5 is flowing oil @ x bopd and next steps, hopeful that we'll get it flowing @ commercial rates by x. If it's a trickle, unlikely to flow then tell us but sadly we all know the real truth.
They've given investors the forum to ask some important questions so let's ask them.
KumKuat - Clive did say at the AGM if the questions asked on the boards are too tricky they would stop releasing the info in the RNS's - they did that ... I wouldn't suggest asking Clive too much before that means of dis information is also removed : )
If 60% of each barrel is exported at $40 and 40% is sold locally at $6, then the revenue from that repesentative barrel will be $26.4. In the AGM question they said a Brent price of $40 led to $21 net. If this is revenue net of costs that suggests costs of $5.4 per barrel. Since we were separately told that we get less than Brent (but not told by how much), this squeezes the implied costs further.
Separately we were told that a Brent of $35 led to breakeven. Plugging $35 into the above revenue of a representative barrel yields a revenue per barrel of $23.4. This implies costs are $23.4 per barrel. This is an estimate and will be over by the amount by which the CASP export price falls short of Brent. We thereforel end up with a much higher figure for costs than in my first calculation if CASP's export price is anywhere near Brent (the January and February RNS's suggest it is reasonably close)
Both these things cannot be true or if they are then substantially different definitions of costs are being used.
Because of this contradiction, I wondered whether the AGM figure of $21-$25 might be net revenue
I took it to be revenue net of costs. another one to qualify out via the questions opportunity.
Kumkuat, when I did a back of the envelope calculation of the revenue in Q3 based on 1640 bopd at the weekend, i assumed $40 for export and $7 for domestic, based on CCs comments in the last AGM. It still came in at $3.5m - $4.0m for the quarter
I was always a bit unsure about the AGM answer of $40 Brent meaning $21 net for CASP. Did it mean net revenue or revenue net of costs and if so which costs was it net of? $35 for Brent was described as breakeven which helps a little but not that much!
The company have added 'shareholder questions' to the website so very important that we ask pertinent questions. Lots of scaremongering on various blogs , new names appearing etc, always going to happen when you hot the losers leaderboard.
The 'going concern' element needs to be qualified. I'm not overly worried about the $3.8m to oil traders, $5m to KO, i'm more interested to understand current incoming oil revenues. Domestic at historic lows so i'm assuming that 40% of the existing 1600 bopd is at that but needs qualifying. So the other 960bopd is at c $21 ? They stated on the AGM answers that $40 gross will return $21 net of costs, important to qualify that out. By my reckoning that generates c $735k from current production with 141,144 and SY shut in 300 bopd on top. Add 151 to that and that's way over 2500bopd, we can all work out the sums.
My concern is that they're not achieving the $21 so important to get that confirmed. The only other big risk is the oil price.
Also interesting to see the commentary on A5. They're never going to flow it at full choke but they've stated that oil flowing to surface but not at rates previously encountered. What does that mean ? at the 2k it flowed for hours back in 2014 or 3800bopd ? A fair question to ask, what is it currently flowing at ? They know the details, it's material and it should be in the public domain.
Personally, i'm going to add another sizeable chunk, i did it back in the earl days where the situation with Roxi was far worse. Not going under but it would be good to get some more meat on that bone.