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94.0¢ awe limited

Ann: AWE Completes Divestment Program with Tui Sale, page-4

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g12m0

1,632 Posts.

52

13/12/16

15:03

Post #: 21303875
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Originally posted by db76 ↑

FY16 report - tui has 2P reserves of 1.1mmboe and 2c 0.9mmboe

Provisions for restoration and abandonment total for all AWE was $218.515M

announcement said it would reduce AWE's provisions by 33%

so selling it for US$1.5M will mean avoidance of provisions of about $72M

hence non cash profit after tax of about $28M

they lose the potential for 2P+2C of 2mmboe

Usually in this sort of deal the seller would retain some interest in the permit, PMP38158.
Like if production greater than X or Reserves greater than Y the seller gets a cut.
They don't seem to have done so.

The buyer may find more oil.

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Thanks. AWE is in a worst position than I thought. It has legacy projects with still over $140m of restoration and abandonment provisions. Valuing AWE using 2P could lead to lofty valuation.

AWE Price at posting: 63.5¢ Sentiment: Hold Disclosure: Held
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0 Great analysis

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