IMHO I was disappointed in the BMG Q1 calendar 2007 results (as per AZA presentation, released after the ASX closed on Wednesday):
(a) Current stablised rate of GOR 2,500 scf/bbl (versus 2,000 actual early March 2007, per page 15 of BPT 20 March 2007 investor presentation);
(b) Production (100%) 780,000 bbls (approx) which is only 8,667 bopd (100%) based on 90 days in the quarter. This is significantly short of the medium term target (15,000-20,000 bopd (100%)) and what it was averaging for Jan/Feb 2007 (approx. 10,000 bopd (100%), per page 15 of BPT 20 March 2007 investor presentation); and
(c) AZA is forecasting a production rate for the remainder of calendar 2007 of approx. 15,300 bopd (100%): based on approx. 5 million bbls total BMG production for calendar 2007 (page 19 of AZA presentation) less 780,000 bbls produced above divided by 275 days remaining in the calendar year.
The above should not be “lost” BMG oil production (assuming 2P oil reserves stay the same) just deferred into future periods, but there will be a consequent decrease in NPV of the BMG project (in any case, this NPV will unwind over time if you are a long term shareholder) at this point in time.
AZA
anzon australia limited
