VOG 2005 New Thread

Liarspoker

500 Bls a day should initially net (before they move to export) circa $22/b.

Using operating costs of say $2.50/b and transport, pipeline & sales costs of a further $9.50 and say 8% royalty (at most) of $2 should leave around $8 per barrel to VOG or $4000/day or $120k clear per month for the first few months until further production and export is achieved.

With 1800 bls a day expected before the end of the first year that should translate to at least $430k clear per month or if export prices of circa $55/b are achievable should bring a further $15/b to VOG (after the Kaz government get a higher share from export revenues).

The sooner they are pumping sufficient oil that will qualify them into export status the better. Id like to see moves by the end of this first 6 months that they are exporting oil.

That should equate (based on 1800 bls/day) to around $1.25m per month clear to VOG or $15m per year out of which they can rapidlly finance further drilling and create a great cash cow. They are aiming for 4300 bls over 3 years but this was based on the original plan for Kemerkol before they bought the 4 fold increase in acerage and larger reserves of around 60mbo potential. It's easy to see that in the second and third years VOG could easily be generating between $30m year 2 - $50m+ year 3 pre-tax. (Just from - KEMERKOL ALONE) Obviously tax will be less if they are spending on the development of the field.

With the potential incraese in reserves up to 60mbo (from circa 16.4mbo in the original purchase) I'd expect VOG to have a revised plan of pumping closer to 10,000 bopd rather than the 4300 envisaged by year 3 such are the nature of the increased levels of reserves at Kemerkol otherwise it would take nearly 40 years to drain the field at the original planned level. I see they are planning further seismic here which is a good sign.