Central Block Base case profitability.13 May 2025 09:18
Based on the CB metrics, I’ve taken a rough guess on profits for TXP’s 65% ownership.
I’m making assumptions, and not including others costs and before cost rationalisation, workovers, two new CB wells.
I’m assuming it’s been consistently throwing off anything from $1m to $1.5m per month, although very difficult to know as they’re so embedded in Shell financials.
As an example, taking the 65% share TXP will own, what does the equivalent of 2000 mmcf/d at $4 mmcf pricing look like? Remember, CB has 3 contracts, one is local and two are much more lucrative LNG export oriented.
Let's also factor in the **132 barrels of oil equivalent per day (boepd)** at **$40(guess) per barrel profit** into the revenue calculation for the natural gas liquids proportion TXP will receive:
### **1. LNG Revenue (12,000 MMcf/d at $4 per MMcf)**
- **Daily:** $48,000
- **Monthly (30 days):** $1,440,000
- **Annual (365 days):** $17,520,000
### **2. Oil Revenue (132 boepd at $40 per barrel profit)**
- **Daily:**
132 x 40 = 5,280 { USD/day}
**Monthly (30 days):** 5,280 x 30 = 158,400 { USD/month}
- **Annual (365 days):** 5,280 x 365 = 1,927,200 { USD/year}
### **Total Revenue (LNG + Oil)**
- **Daily:** 48,000 + 5,280 = 53,280 { USD/day}
- **Monthly:** 1,440,000 + 158,400 = 1,598,400 { USD/month}
- **Annual:** 17,520,000 + 1,927,200 = 19,447,200 { USD/year}
This gives a **combined annual revenue of $19.45 million**, assuming constant production and market stability.
If I assume, we employ 80 staff in CB, and manage to reduce over time to 30 staff, and gross costs are 4000 USD per month per employee, then costs would be:
1. **Monthly Payroll Cost**
30 employees x 4000USD/month= 120,000.
2. **Annual Payroll Cost**
120,000 x 12 = 1,440,000 USD/year.
Take 65% of that and I get $936,000, let’s assume $1m.
So $18.5m profits from operations, without other costs of course.
So I think I’m ok assuming $1.5m per month for CB once we get it bedded and optimised. We then sweat the assets with other surrounding licences and CB new wells.
CB should easily cover debt repayments on its own.
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