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Thanks Mick for the reply, I've passed along the question, and specifically asked to clear it out in a more layman term. How ever, the total OPEX for 2017 is clearly stated in the CPR issued this year, and thus theres no doubt that Mnazi total OPEX 2017 was a little under 12 m$, and our share clearly only represent around 3.7 m$/year. These cash call numbers may or may not (I certainly hope so) include either a part of our G&A who may be related to the joint venture, or it's some kind of TPDC cost and later receivables.
It's still stands as a big question mark, but it'll keep digging. It will certainly surprise me if we incurs that kind of oper. cost.
Hi Mick,
Preciate very much your thoughtful thoughts and lately very interesting questions and replies.
Regarding those cash calls, I've tried to figure those numbers out literally the most of the weekend, and time and time again it doesn’t add up, at least not to my understanding and what I could learn from the CPR and past Q/Y reports. It seems like you’ve got an idea about these cash calls and how they relate to our part of OPEX cost and possibly (I think) part of our G&A who may or may not be included in those cash calls, and thus a part of the Mnazi joint venture operation.
According to the latest CPR the total 2017 OPEX cost for all Mnazi field was around 11,8 m$, and thus 3,7 m$ net to WRL for our share of operating and production cost, and what I can’t wrap my head around is that we’re being charged 400 – 450 k$/month, ~5 m$/year in cash call, as opposed to the ~3-3.5 m$/year stated in the financial report which as well match quite nicely with the stated OPEX in the CPR budget.
So, either it’s 1 a question about we’re carrying some joint venture related cost in our G&A expenses, and thus the cash calls don’t seems do add up with production and operating cost?
Or 2, Mnazi Total OPEX has increased to around 15 m$/year, and thus the cash calls on our balance sheet and the operating cost in our financial statement are not at all related, and we therefore incur both these cash calls, and also some prod./oper. expenses not related to the joint venture.
A last third thought I can think about is that these cash calls include our share of TPDC, and therefore we pay 40% of oper. cost upfront, and afterwards receive them back from TPDC through receivables.
It’s probably neither of those stated, and I would therefor appreciate if you were able to enlighten me, because I really can’t wrap my head around this question.
Financial statement is clear about Production and Operating cost for 1H2018 of 1,47 m$, as opposed to the stated cash call of 3,49 m$ also for operating cost. Seems really odd.
Sorry about the long write, it sums up quite nicely how confused I’ve been.
Thanks Mick
Best regards Mikkel
It seems more suitable to use an P/EBITDA - Capex, as most of the capex is already invested in the field. As I remember WRL share of investment in Mnazi is well above 100 mUSD, and according to the most recent CPR 2p reserves need only capital of 18 mUSD. I did a brief calculation, dividing the Capex of 18 mUSD over the next 10 years, at a production level of a 100 mmscf/d brings a free cash flow ex. TPDC receivable of 17,6 mUSD/year. And as so a P/"E" of 4, I've reckon a P/E 12-15 would be suitable given the low interest rate environment we live in.
I just spoke with the IR of Dangote. "There is no date set for the FY2017 results at present, though I anticipate it will be before the end of March. TZ�s has turbines will be running this month. Gas-fired kilns will be later in the year. Regards" In other words, it seems like the 80 mmscf/d is without Dangote at all.
Indeed, Geoff said last day production was around 73 mmscf at the cc this morning.
Dear ....... Thank you. We had seen this and have also discussed it with M&P. Their main point was to express frustration over the delayed payments from TANESCO (not TPDC). We have no intention of stopping gas sales to TPDC (which go to Ubungo II and Kinerezi I power plants). The wells are continuing to perform well and in-line with expectations. There is no necessary maintenance required – he was trying to make the point that without regular payments we will not be able to carry out necessary maintenance as and when required. We believe that M&P were mis-quoted in this article and we do try not to comment on media speculation as they often don’t provide an accurate account. I hope that helps. All the best Katherine