Summary28 Jul 2025 12:16
In case someone missed Andypaps post due to garbage being posted by a few.
A summary of my detailed 14:36 post from Saturday 25th July which factored in all valuation drivers: gas price, resource size, PSC terms, capex/opex, taxation, risk discounting for 2C resources, and appropriate financial discounting. Read that post if you want the reasoning behind my figures.
1. Gross Resource and Revenue Estimates
β’ Total recoverable 2C resource (gross): 376 Bcf
β’ Empyreanβs 8.5% share: 31.96 Bcf
β’ Assumed gas price: US$11.95/MMBtu (based on June 25 ICP average)
β’ Gross field revenue: US$4.49 billion
β’ Empyrean's pre-PSC revenue share: US$382 million
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2. Production Sharing Contract (PSC) Adjustment
β’ Typical Indonesian PSC structure:
o Cost recovery cap: 70% of gross revenue
o Profit gas split: 65% to government, 35% to contractors
β’ Empyreanβs adjusted share post-PSC: 6.29% of gross = US$282 million
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3. Cost and Tax Assumptions
β’ Opex: US$1.00/Mcf β US$31.96 million
β’ CapEx (net): US$2.00/Mcf β US$63.9 million (may be conservative due to pipeline support from PLN)
β’ Total project costs: US$95.9 million
β’ Net revenue post-costs: US$282m β US$95.9m = US$186.1 million
β’ Indonesian tax (22%): US$40.9 million
β’ Net after-tax cashflow: US$145.2 million
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4. Risk Adjustment
β’ Contingent resource status (2C) with GSA signed, pre-FID
β’ Industry-standard risk factor for this stage: 85%
β’ Risk-adjusted value: US$123.4 million
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5. Discounting to Present Value
β’ Production window: 2027β2036 (10 years; GSA to Jan 2037)
β’ Annual average cash flow: US$12.34 million
β’ Discount rate (pre-FID SE Asia standard): 11%
β’ Net Present Value (NPV): US$80.67 million
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6. Valuation Per Share
β’ GBP conversion (rate: 1.343): Β£60.06 million
β’ Shares in issue (post-raise): 5,719,672,441
β’ Value per share: 1.05p
β’ Current share price (as of Friday): 0.125p
β’ Implied upside: 8.4x
In my view this is what a buyer will pay now based on a Jan 2027 production date.