RE: Malcy8 Feb 2019 14:03
On the revenue side - Selva production from 2020 (PXOG development share paid for) - 150,000 m^3/day at €0.25/m^3 x 350 days (for 2 weeks downtime?) = €13,125k x 17% (PXOG ownership) = €2,231k, less opex costs of €220k pa and tax @ 29% (Peterhouse) = €1,428k @ €/GBP£ 1.14 = GBP£1,252k per year. (Note – I believe Ed mentions €1-2m p.a., so workings seem to support this, but note gas price fluctuations €0.2-0.3 range).
Peterhouse (page 14) anticipated initial flow at 2500 mcfd (70,800 m^3), rising to 5300 mcfd (150,000 m^3) for 3 years and then tailing off gradually over a further 15 years. The initial production rate now seems low as 150,000 m^3 is regularly quoted by all parties.
Peterhouse attributed a net to PXOG NPV of €5.1m, so £4.5m. That equates to a SP of 0.33p fully diluted (including all options and warrants). Likely conservative based on gas price alone.
Before updated CPR – Gross 1C 7.2, 2C 18.6, 3C 29.9, net to PXOG 1.2, 3.2, 5.1. From the updated CPR – net to PXOG 1P 0.697, 2P 2.26, 3P 5.1. Apparently the reason for the lower 1P/2P vs 1C/2C is on the expectation that the reservoir would not be ‘emptied’! However, note that the 3P figure is the same as the 3C and the likelihood of achieving the higher figure should have improved. The key point here though is that we have moved from ‘Contingent Resources’ to ‘Reserves’. CoS for - 1P >= 90%, 2P >=50%, 3P < 50%.
On a crude (non-DCF basis), the 2.26BCF equates to 64m m^3, so @ €0.25/m^3 = €16m, less (say) opex of ~€4m = €12m, less tax @ 29% = €8.5m or ~£7.5m to PXOG, over ~18 years, but front loaded.
So Selva worth 0.33p? Err, what about Romania production? And never mind Italy exploration and the next well in Romania. Oh, and I nearly forgot about Spain – just needs some good news here to (hopefully quite dramatically) break the current ‘disconnect with reality’.
IMHO / DYOR / GLA
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