FCF analysis of E/A – Comments welcome

[sltibbs]

STP,

The 15% is high, but there is risk there until the Project Agreement is modified and a supermajor joins in. If the discount rate, which I made easily adjustable, drops from 15% to 12% the price estimate increases from 149 to 198, both of which are a long way from the current price. Of course, drop it to 10% and the price estimate is 242. Also, note that my PV of the FCFs only relates to E/A. If the seismics are correct on B/T, then double everything. By the way did you see the second tab of the spreadsheet?

So, we just need the announcements to come. I know stuff is happening in the background, just need it to get it finalized.

Palm,

Thanks for the link. I will check it out. Yes, 2017 shouldn't be a problem.

Best,
Sam

[admin]

Sam, thanks. From memory, I think the likes of MS and Macquarie and RJ value with a lower discount and correct their NAV for risk. That is, the discount rate assumes Fids and govt. approval (after which only execution risk remains for the project, which can't be terribly big, especially since the plants aren't build on site, mostly). But then again, I'm no accountant, needless to say.

[efi426hemi]

Bumping for sheer awesomeness!