Petrel Resources - moderated discussion/research part II

Scoby
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Joined: 08-Dec-04
Location: Ireland
Posts: 88 Posted: 18-Oct-05 at 19:34 | IP Logged

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Some observations on Bo's posts today (08.45 and 11.06)



The example of EMV = -$14.4 m uses probability of success at 3%, NPV of $500m and Exploration costs of $30m. I thought it would be of interest to look at 2 table array of parameter alternatives (Success probability and NPV)

The table below sets out a grid whereby you can see the effect of different percentage and NPV values

EMV '000
-14.1 500 520 540 560 580 600 620 640
3% -14.1 -13.5 -12.9 -12.3 -11.7 -11.1 -10.5 -9.9
4% -8.8 -8.0 -7.2 -6.4 -5.6 -4.8 -4.0 -3.2
5% -3.5 -2.5 -1.5 -0.5 0.5 1.5 2.5 3.5
6% 1.8 3.0 4.2 5.4 6.6 7.8 9.0 10.2
7% 7.1 8.5 9.9 11.3 12.7 14.1 15.5 16.9
8% 12.4 14.0 15.6 17.2 18.8 20.4 22.0 23.6
9% 17.7 19.5 21.3 23.1 24.9 26.7 28.5 30.3
10% 23.0 25.0 27.0 29.0 31.0 33.0 35.0 37.0
11% 28.3 30.5 32.7 34.9 37.1 39.3 41.5 43.7
12% 33.6 36.0 38.4 40.8 43.2 45.6 48.0 50.4
13% 38.9 41.5 44.1 46.7 49.3 51.9 54.5 57.1
14% 44.2 47.0 49.8 52.6 55.4 58.2 61.0 63.8
15% 49.5 52.5 55.5 58.5 61.5 64.5 67.5 70.5
16% 54.8 58.0 61.2 64.4 67.6 70.8 74.0 77.2
17% 60.1 63.5 66.9 70.3 73.7 77.1 80.5 83.9
18% 65.4 69.0 72.6 76.2 79.8 83.4 87.0 90.6




Scoby

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Scoby
Regular Contributor



Joined: 08-Dec-04
Location: Ireland
Posts: 88 Posted: 18-Oct-05 at 19:54 | IP Logged

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Bo's post at 11.06 contains a mind boggling set of assumptions. Nevertheless I would expect this is the type of model which must be set up at the commencement of any exploration project. It can then be refined and updated as the log data rolls in.

I just looked at one figure, the Revenue for 2009 ($548m) which I take to be Barrells per day X Price per Barrell X 365.5. Obviously this will have a crucial impact on the final figure for NPV. I think it is reasonable to assume that the price per barrell could run well in excess of $50 . The table below sets out the effect on revenue of prices ranging from $55 to $100

Revenue p/a $'000
548250
55 603075
60 657900
65 712725
70 767550
75 822375
80 877200
85 932025
90 986850
95 1041675
100 1096500


Scoby