Time Value of Money 0 Money 500 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 US$ in wallet 500 500 500 500 500 500 500 500 500 500 500 US$ in bank 525 551 579 608 638 670 704 739 776 814 855 Inflation 4% 4% 4% 4% 4% 4% 4% 4% 4% 4% 4% Interest Rate 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% Cumulative Interest Rate 1.05 1.10 1.16 1.22 1.28 1.34 1.41 1.48 1.55 1.63 1.71 Discounted Cashflow 476 454 432 411 392 373 355 338 322 307 292 NPV 4153 Cost of printer ink 5 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 US$ flat US$ inflation 5.20 5.41 5.62 5.85 6.08 6.33 6.58 6.84 US$ Amount of printer ink 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 US$ no inflation US after inflation 96 92 89 85 82 79 76 73 US$ after inflation with interest 101 102 103 104 105 106 107 108 Real versus Nominal Costs At Dec 31 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 US$ Nominal 1 1 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Inflation Rate 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% Multiplier 1 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Money available 100 Chocolate Bars Money Invested 100.0 Chocolate Bars 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 US$ Real (2018) Money Available Cost of Choc Bar ##### Sheet/List 2 ##### Real and Nominal Year 1 Year 2 Year 3 Year 4 Year 5 Real 100 100 100 100 100 Nominal 102.5 105.1 107.7 110.4 113.1 Inflation 2.5% Capex US$2022 500 Nominal 539 Oil Price Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Real 30 30 30 30 30 30 30 30 30 30 Nominal 30.6 31.21 31.84 32.47 33.12 Inflation 2% ##### Sheet/List 3 ##### Example Discounted Cashflow Example 1 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Cashflow -20 -20 -20 30 30 30 30 30 30 30 Discount Factor 1.05 1.10 1.16 1.22 1.28 1.34 1.41 1.48 1.55 1.63 Discounted Cashflow -19.0 -18.1 -17.3 24.7 23.5 22.4 21.3 20.3 19.3 18.4 NPV (Net Present Value) 95.5 Discount Rate 5.0% Excel Calculation IRR 31.6% -600 100 Example 2 -20 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Capital Cost -200 -200 -200 Revenue 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 Operating Cost -20 -20 -20 -20 -20 -20 -20 -20 -20 -20 -20 -20 -20 -20 -20 -20 -20 Net Cashflow -200 -200 -200 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 Discount Factor 1.10 1.21 1.33 1.46 1.61 1.77 1.95 2.14 2.36 2.59 2.85 3.14 3.45 3.80 4.18 4.59 5.05 5.56 6.12 6.73 Discounted Cashflow -181.8 -165.3 -150.3 54.6 49.7 45.2 41.1 37.3 33.9 30.8 28.0 25.5 23.2 21.1 19.2 17.4 15.8 14.4 13.1 11.9 NPV -15.2 Discount Rate 10.0% IRR 9.57% IRR Internal Rate of Return Excel Calculation -15.2 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Cumulative Cashflow -200 -400 -600 -520 -440 -360 -280 -200 -120 -40 40 120 200 280 360 440 520 600 680 760 Disc Cum Cashflow -181.8 -347.1 -497.4 -442.7 -393.1 -347.9 -306.8 -269.5 -235.6 -204.8 -176.7 -151.2 -128.1 -107.0 -87.8 -70.4 -54.6 -40.2 -27.1 -15.2 Payback period 11 Discounted payback period 20 ##### Sheet/List 4 ##### WACC Calculation Risk Free Rate 1.75% Corporate Interest Rate 5.00% Equity market return 10.53% Company Beta 1.5 Corporate Tax Rate 20% Debt Equity Debt:Equity Split 50% 50% Cost of Debt 4.00% Cost of Equity 14.92% WACC 9.46% ##### Sheet/List 5 ##### An Example Conventional Oil Field Sensitivities 1 0% Base Results Oil Price 1 2 15% High NPV 3543 US$mm Production 1 3 30% Upside IRR 19% % Operating Costs & Transport 1 4 -15% Low Capex 1 5 -30% Downside 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 Revenues 0 0 0 0 696 1314 1752 2190 2628 2628 2628 2628 2628 2497 2372 2253 2141 2033 1932 1835 1743 1656 1573 1495 Operating Costs 0 0 0 0 -54 -100 -133 -167 -200 -200 -200 -200 -200 -190 -181 -171 -163 -155 -147 -140 -133 -126 -120 -114 Transport Costs 0 0 0 0 -33 -60 -80 -100 -120 -120 -120 -120 -120 -114 -108 -103 -98 -93 -88 -84 -80 -76 -72 -68 Operating Taxes 0 0 0 0 -125 -236 -315 -393 -472 -472 -472 -472 -472 -449 -426 -405 -385 -365 -347 -330 -313 -298 -283 -269 EBITDA (Pre-tax Cashflow) 0 0 0 0 485 918 1224 1530 1836 1836 1836 1836 1836 1744 1657 1574 1495 1421 1350 1282 1218 1157 1099 1044 Depreciation 0 0 0 0 -89 -164 -219 -273 -328 -328 -328 -328 -328 -311 -296 -281 -267 -254 -241 -229 -217 -207 -196 -186 Straight Line (0) or Unit of Prod (1) 1 EBIT (Post Tax Profit) 0 0 0 0 396 754 1005 1257 1508 1508 1508 1508 1508 1433 1361 1293 1228 1167 1109 1053 1001 950 903 858 Tax on EBIT 0 0 0 0 -79 -151 -201 -251 -302 -302 -302 -302 -302 -287 -272 -259 -246 -233 -222 -211 -200 -190 -181 -172 Corporate Tax Rate 20% Post tax cashflow 0 0 0 0 405 767 1023 1279 1534 1534 1534 1534 1534 1458 1385 1315 1250 1187 1128 1071 1018 967 919 873 CAPEX -1000 -1000 -1000 -1000 -150 -150 -150 -150 -150 -10 -10 -10 -10 -10 -10 -10 -10 -10 -10 -10 -10 -10 -10 -10 Free Cashflow (FCF) -1000 -1000 -1000 -1000 255 617 873 1129 1384 1524 1524 1524 1524 1448 1375 1305 1240 1177 1118 1061 1008 957 909 863 Cumulative FCF -1000 -2000 -3000 -4000 -3745 -3127 -2255 -1126 258 1782 3307 4831 6355 7803 9177 10483 11722 12900 14017 15079 16087 17044 17952 18815 Discount Rate 9.5% Discount Factor 1.09 1.20 1.31 1.44 1.57 1.72 1.88 2.06 2.26 2.47 2.70 2.96 3.24 3.54 3.88 4.25 4.65 5.09 5.57 6.10 6.67 7.30 8.00 8.75 Discounted Cashflow (DCF) -914 -835 -762 -697 163 359 464 548 614 617 564 515 471 408 354 307 267 231 201 174 151 131 114 99 NPV ($mm) 3543 IRR (%) 18.6% Payback (years) 9 When does cumulative cashflow turn positive Excel Calculation "$3,543 " Breakeven Oil Price $80.00 After Goal Seek Function in Data:What If Alternative NPV (terminal value) FCF for 10 years -913.5757354 -1000 -1000 -1000 255 617 873 1129 1384 1524 1524 Terminal Value 12851 Implied FCF -913.5757354 -1000 -1000 -1000 255 617 873 1129 1384 1524 1524 12851 Implied DCF -834.6206244 -835 -762 -697 163 359 464 548 614 617 564 4344 NPV 4543 Plus Cash 0 Less Debt 0 Total NPV 4543 IRR 23% EBITDA Multiple 7 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 Revenues 0 0 0 0 696 1314 1752 2190 2628 2628 2628 2628 2628 2497 2372 2253 2141 2033 1932 1835 1743 1656 1573 1495 Lifting Costs 0 0 0 0 -54 -100 -133 -167 -200 -200 -200 -200 -200 -190 -181 -171 -163 -155 -147 -140 -133 -126 -120 -114 Transport 0 0 0 0 -33 -60 -80 -100 -120 -120 -120 -120 -120 -114 -108 -103 -98 -93 -88 -84 -80 -76 -72 -68 Operating Taxes 0 0 0 0 -125 -236 -315 -393 -472 -472 -472 -472 -472 -449 -426 -405 -385 -365 -347 -330 -313 -298 -283 -269 Corporate Tax 0 0 0 0 -79 -151 -201 -251 -302 -302 -302 -302 -302 -287 -272 -259 -246 -233 -222 -211 -200 -190 -181 -172 Capex -1000 -1000 -1000 -1000 -150 -150 -150 -150 -150 -10 -10 -10 -10 -10 -10 -10 -10 -10 -10 -10 -10 -10 -10 -10 Free Cashflow -1000 -1000 -1000 -1000 255 617 873 1129 1384 1524 1524 1524 1524 1448 1375 1305 1240 1177 1118 1061 1008 957 909 863 ##### Sheet/List 6 ##### Production Oil Gas Total mmbbls kbpd Bcf mmcfd mmboe Resources 0 Recovery Factor 0% Reserves 500 1000 667 Start date 5 years after first capex Peak as % Reserves 5 years after first capex Peak Production (mmbbls) 30 82 6% 60 164 Time to Peak (yrs) 5 5 Length of Peak (yrs) 5 5 Decline rate (%) 5% 5% First capex 1st year Peak Oil 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 Oil production 0.00 0.00 0.00 0.00 7.50 15.00 20.00 25.00 30.00 30.00 30.00 30.00 30.00 28.50 27.08 25.72 24.44 23.21 22.05 20.95 19.90 18.91 17.96 17.06 Total oil produced to 2040 463.3 Barrels per day 0 0 0 20548 41096 54795 68493 82192 82192 82192 82192 82192 78082 74178 70469 66946 63598 60419 57398 54528 51801 49211 46751 Gas Production 0.00 0.00 0.00 0.00 20.00 30.00 40.00 50.00 60.00 60.00 60.00 60.00 60.00 57.00 54.15 51.44 48.87 46.43 44.11 41.90 39.81 37.81 35.92 34.13 Total gas produced to 2040 881.6 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 Oil Production (mmbbls) 0.0 0.0 0.0 0.0 7.5 15.0 20.0 25.0 30.0 30.0 30.0 30.0 30.0 28.5 27.1 25.7 24.4 23.2 22.1 21.0 19.9 18.9 18.0 17.1 Gas Production (mmboe) 0.0 0.0 0.0 0.0 3.3 5.0 6.7 8.3 10.0 10.0 10.0 10.0 10.0 9.5 9.0 8.6 8.1 7.7 7.4 7.0 6.6 6.3 6.0 5.7 Total (mmboe) 0.0 0.0 0.0 0.0 10.8 20.0 26.7 33.3 40.0 40.0 40.0 40.0 40.0 38.0 36.1 34.3 32.6 31.0 29.4 27.9 26.5 25.2 23.9 22.8 Production Scenarios Total Produced Oil Production Scenarios 1 463.28 2 532.78 3 602.27 4 393.79 5 324.30 Gas Production Scenarios 1 931.57 2 1071.30 3 1211.04 4 791.83 5 652.10 ##### Sheet/List 7 ##### Revenue Calculation Export % Oil 80% Gas 50% 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 Oil Production 0.0 0.0 0.0 0.0 7.5 15.0 20.0 25.0 30.0 30.0 30.0 30.0 30.0 28.5 27.1 25.7 24.4 23.2 22.1 21.0 19.9 18.9 18.0 17.1 Domestic Sales 0.0 0.0 0.0 0.0 1.5 3.0 4.0 5.0 6.0 6.0 6.0 6.0 6.0 5.7 5.4 5.1 4.9 4.6 4.4 4.2 4.0 3.8 3.6 3.4 Export Sales 0.0 0.0 0.0 0.0 6.0 12.0 16.0 20.0 24.0 24.0 24.0 24.0 24.0 22.8 21.7 20.6 19.5 18.6 17.6 16.8 15.9 15.1 14.4 13.7 Domestic Oil Price 40 40 40 40 40 40 40 40 40 40 40 40 40 40 40 40 40 40 40 40 40 40 40 40 Export Oil Price 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 Domestic Revenue 0 0 0 0 60 120 160 200 240 240 240 240 240 228 217 206 195 186 176 168 159 151 144 137 Export Revenue 0 0 0 0 480 960 1280 1600 1920 1920 1920 1920 1920 1824 1733 1646 1564 1486 1411 1341 1274 1210 1150 1092 Total Oil Revenue 0 0 0 0 540 1080 1440 1800 2160 2160 2160 2160 2160 2052 1949 1852 1759 1671 1588 1508 1433 1361 1293 1229 Gas Production 0.0 0.0 0.0 0.0 20.0 30.0 40.0 50.0 60.0 60.0 60.0 60.0 60.0 57.0 54.2 51.4 48.9 46.4 44.1 41.9 39.8 37.8 35.9 34.1 Domestic Gas Price 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 Export Gas Price 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 Domestic Sales 0 0 0 0 10 15 20 25 30 30 30 30 30 29 27 26 24 23 22 21 20 19 18 17 Export Sales 0 0 0 0 10 15 20 25 30 30 30 30 30 29 27 26 24 23 22 21 20 19 18 17 Domestic Revenue 0 0 0 0 52 78 104 130 156 156 156 156 156 148 141 134 127 121 115 109 103 98 93 89 Export Revenue 0 0 0 0 104 156 208 260 312 312 312 312 312 296 282 268 254 241 229 218 207 197 187 177 Total Gas Revenue 0 0 0 0 156 234 312 390 468 468 468 468 468 445 422 401 381 362 344 327 310 295 280 266 Total Revenues 0 0 0 0 696 1314 1752 2190 2628 2628 2628 2628 2628 2497 2372 2253 2141 2033 1932 1835 1743 1656 1573 1495 Oil Production Scenarios 1 0.0 0.0 0.0 0.0 7.5 15.0 20.0 25.0 30.0 30.0 30.0 30.0 30.0 28.5 27.1 25.7 24.4 23.2 22.1 21.0 19.9 18.9 18.0 17.1 2 0.0 0.0 0.0 0.0 8.6 17.3 23.0 28.8 34.5 34.5 34.5 34.5 34.5 32.8 31.1 29.6 28.1 26.7 25.4 24.1 22.9 21.7 20.7 19.6 15% 3 0.0 0.0 0.0 0.0 9.8 19.5 26.0 32.5 39.0 39.0 39.0 39.0 39.0 37.1 35.2 33.4 31.8 30.2 28.7 27.2 25.9 24.6 23.4 22.2 30% 4 0.0 0.0 0.0 0.0 6.4 12.8 17.0 21.3 25.5 25.5 25.5 25.5 25.5 24.2 23.0 21.9 20.8 19.7 18.7 17.8 16.9 16.1 15.3 14.5 -15% 5 0.0 0.0 0.0 0.0 5.3 10.5 14.0 17.5 21.0 21.0 21.0 21.0 21.0 20.0 19.0 18.0 17.1 16.2 15.4 14.7 13.9 13.2 12.6 11.9 -30% Gas Production Scenarios 1 0.0 0.0 0.0 0.0 20.0 30.0 40.0 50.0 60.0 60.0 60.0 60.0 60.0 57.0 54.2 51.4 48.9 46.4 44.1 41.9 39.8 37.8 35.9 34.1 2 0.0 0.0 0.0 0.0 23.0 34.5 46.0 57.5 69.0 69.0 69.0 69.0 69.0 65.6 62.3 59.2 56.2 53.4 50.7 48.2 45.8 43.5 41.3 39.2 15% 3 0.0 0.0 0.0 0.0 26.0 39.0 52.0 65.0 78.0 78.0 78.0 78.0 78.0 74.1 70.4 66.9 63.5 60.4 57.3 54.5 51.7 49.2 46.7 44.4 30% 4 0.0 0.0 0.0 0.0 17.0 25.5 34.0 42.5 51.0 51.0 51.0 51.0 51.0 48.5 46.0 43.7 41.5 39.5 37.5 35.6 33.8 32.1 30.5 29.0 -15% 5 0.0 0.0 0.0 0.0 14.0 21.0 28.0 35.0 42.0 42.0 42.0 42.0 42.0 39.9 37.9 36.0 34.2 32.5 30.9 29.3 27.9 26.5 25.1 23.9 -30% Export Oil Price 3543 Base Case 80.0 80.0 80.0 80.0 80.0 80.0 80.0 80.0 80.0 80.0 80.0 80.0 80.0 80.0 80.0 80.0 80.0 80.0 80.0 80.0 80.0 80.0 80.0 80.0 Scenario 2 92.0 92.0 92.0 92.0 92.0 92.0 92.0 92.0 92.0 92.0 92.0 92.0 92.0 92.0 92.0 92.0 92.0 92.0 92.0 92.0 92.0 92.0 92.0 92.0 Scenario 3 104.0 104.0 104.0 104.0 104.0 104.0 104.0 104.0 104.0 104.0 104.0 104.0 104.0 104.0 104.0 104.0 104.0 104.0 104.0 104.0 104.0 104.0 104.0 104.0 Scenario 4 68.0 68.0 68.0 68.0 68.0 68.0 68.0 68.0 68.0 68.0 68.0 68.0 68.0 68.0 68.0 68.0 68.0 68.0 68.0 68.0 68.0 68.0 68.0 68.0 Scenario 5 56.0 56.0 56.0 56.0 56.0 56.0 56.0 56.0 56.0 56.0 56.0 56.0 56.0 56.0 56.0 56.0 56.0 56.0 56.0 56.0 56.0 56.0 56.0 56.0 Domestic Oil Price Base Case 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 Scenario 2 46.0 46.0 46.0 46.0 46.0 46.0 46.0 46.0 46.0 46.0 46.0 46.0 46.0 46.0 46.0 46.0 46.0 46.0 46.0 46.0 46.0 46.0 46.0 46.0 Scenario 3 52.0 52.0 52.0 52.0 52.0 52.0 52.0 52.0 52.0 52.0 52.0 52.0 52.0 52.0 52.0 52.0 52.0 52.0 52.0 52.0 52.0 52.0 52.0 52.0 Scenario 4 34.0 34.0 34.0 34.0 34.0 34.0 34.0 34.0 34.0 34.0 34.0 34.0 34.0 34.0 34.0 34.0 34.0 34.0 34.0 34.0 34.0 34.0 34.0 34.0 Scenario 5 28.0 28.0 28.0 28.0 28.0 28.0 28.0 28.0 28.0 28.0 28.0 28.0 28.0 28.0 28.0 28.0 28.0 28.0 28.0 28.0 28.0 28.0 28.0 28.0 Domestic Gas Price Base Case 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 Scenario 2 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 Scenario 3 6.8 6.8 6.8 6.8 6.8 6.8 6.8 6.8 6.8 6.8 6.8 6.8 6.8 6.8 6.8 6.8 6.8 6.8 6.8 6.8 6.8 6.8 6.8 6.8 Scenario 4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 4.4 Scenario 5 3.6 3.6 3.6 3.6 3.6 3.6 3.6 3.6 3.6 3.6 3.6 3.6 3.6 3.6 3.6 3.6 3.6 3.6 3.6 3.6 3.6 3.6 3.6 3.6 Export Gas Price Base Case 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 10.4 Scenario 2 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 Scenario 3 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 Scenario 4 8.8 8.8 8.8 8.8 8.8 8.8 8.8 8.8 8.8 8.8 8.8 8.8 8.8 8.8 8.8 8.8 8.8 8.8 8.8 8.8 8.8 8.8 8.8 8.8 Scenario 5 7.3 7.3 7.3 7.3 7.3 7.3 7.3 7.3 7.3 7.3 7.3 7.3 7.3 7.3 7.3 7.3 7.3 7.3 7.3 7.3 7.3 7.3 7.3 7.3 Slope 13% ##### Sheet/List 8 ##### Capital Expenditure Reserves 667 Capex per bbl 7.50 Total capex 5000 % before first oil 80% 4000 % first oil to peak 15% 750 Maintenance capex 5% 250 First Capex First Oil Peak Oil 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 US$mm 1000 1000 1000 1000 150 150 150 150 150 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 Before first oil 4000 First oil to peak 750 Maintenance 150 Total 4900 Sensitivities 2 1150 1150 1150 1150 173 173 173 173 173 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 3 1300 1300 1300 1300 195 195 195 195 195 13 13 13 13 13 13 13 13 13 13 13 13 13 13 13 4 850 850 850 850 128 128 128 128 128 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 5 700 700 700 700 105 105 105 105 105 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 15% 30% -15% -30% Field Comparisons Cost /bbl Capex Reserves Peak Prod Peak Prod Capex/ peak bbl US$/bbl US$mm mmbbls kbpd mmbbls US$/bbl Kashagan ( Kazakhstan) 10.46 136000 13000 1500 547.5 248 ACG (Azerbaijan) 4.00 20000 5000 620 226.3 88 Thunderhorse (Gulf of Mexico) 5.00 5000 1000 250 91.25 55 Novy Port (Russia onshore) 3.25 4500 1385 161 58.64 77 Ghawar (Saudi) 3.50 248500 71000 5000 1825 136 Lula (Brazil deep water) 9.04 75000 8300 500 182.5 411 Global Comparisons Capex US$/bbl Saudi Arabia 3.50 Iran 4.48 Iraq 5.03 Russia 5.10 Venezuela 6.66 US shale 7.56 Indonesia 7.65 US conv 7.70 Canada 9.69 Nigeria 13.10 Norway 13.76 Brazil 16.09 UK 22.67 ##### Sheet/List 9 ##### Operating Costs Lifting Costs 5 US$/boe real Total for model 3051 US$mm 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 US$mm 0.0 0.0 0.0 0.0 54.2 100.0 133.3 166.7 200.0 200.0 200.0 200.0 200.0 190.0 180.5 171.5 162.9 154.8 147.0 139.7 132.7 126.0 119.7 113.8 Total 3093 Base Case and Sensitivities 1 5 2 15% 3 30% 4 -15% 5 -30% Global Comparisons Lifting Costs Transport Lifting Transport US$/bbl US$/bbl Iran 1.94 Saudi Arabia 2.49 Iraq 2.16 Iran 2.67 Russia 2.98 Iraq 2.47 Saudi Arabia 3.00 Russia 2.69 Norway 4.24 Indonesia 3.63 US conv 5.15 US conv 3.11 US shale 5.85 Norway 3.12 Indonesia 6.87 US shale 3.52 Venezuela 7.94 Canada 2.92 Nigeria 8.81 Venezuela 2.54 Brazil 9.45 Nigeria 2.97 Canada 11.56 Brazil 2.80 UK 17.36 UK 4.30 Company examples Rosneft 3.10 Lukoil 4.26 BP 6.90 Chesapeake 2.92 Transport Costs Oil 3.00 US$/bbl Gas 0.50 US$/mcf 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 Oil (US$mm) 0.0 0.0 0.0 0.0 22.5 45.0 60.0 75.0 90.0 90.0 90.0 90.0 90.0 85.5 81.2 77.2 73.3 69.6 66.2 62.9 59.7 56.7 53.9 51.2 Gas (US$mm) 0.0 0.0 0.0 0.0 10.0 15.0 20.0 25.0 30.0 30.0 30.0 30.0 30.0 28.5 27.1 25.7 24.4 23.2 22.1 21.0 19.9 18.9 18.0 17.1 Total (US$mm) 0.0 0.0 0.0 0.0 32.5 60.0 80.0 100.0 120.0 120.0 120.0 120.0 120.0 114.0 108.3 102.9 97.7 92.9 88.2 83.8 79.6 75.6 71.8 68.3 Base Case and Sensitivities 1 3.00 2 15% 3 30% 4 -15% 5 -30% ##### Sheet/List 10 ##### Operating Taxes Oil Tax Export Tax Sliding of export barrels Royalty 1.0% of oil revenues Other taxes 0.5% of total revenues Export Oil Price 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 80 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 Export Tax 0.0 0.0 0.0 0.0 90.0 180.0 240.0 300.0 360.0 360.0 360.0 360.0 360.0 342.0 324.9 308.7 293.2 278.6 264.6 251.4 238.8 226.9 215.5 204.8 Royalty 0.0 0.0 0.0 0.0 5.4 10.8 14.4 18.0 21.6 21.6 21.6 21.6 21.6 20.5 19.5 18.5 17.6 16.7 15.9 15.1 14.3 13.6 12.9 12.3 Other 0.0 0.0 0.0 0.0 3.5 6.6 8.8 11.0 13.1 13.1 13.1 13.1 13.1 12.5 11.9 11.3 10.7 10.2 9.7 9.2 8.7 8.3 7.9 7.5 Total 0 0 0 0 98.88 197.4 263.2 329.0 394.7 394.7 394.7 394.7 394.7 375.0 356.3 338.4 321.5 305.4 290.2 275.7 261.9 248.8 236.3 224.5 Export Tax Cut-off point 20 US$/bbl Tax 25% above cut-off point Export Tax ($/bbl) 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 Gas Tax Export Tax 20% export revenues Royalty 0.25 US$/mcf 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 Export Tax 0 0 0 0 21 31 42 52 62 62 62 62 62 59 56 54 51 48 46 44 41 39 37 35 Royalty 0 0 0 0 5 8 10 13 15 15 15 15 15 14 14 13 12 12 11 10 10 9 9 9 Total 0 0 0 0 26 39 52 65 77 77 77 77 77 74 70 66 63 60 57 54 51 49 46 44 Total Operating Taxes 0 0 0 0 125 236 315 393 472 472 472 472 472 449 426 405 385 365 347 330 313 298 283 269 Total US$/boe 11.80 11.80 11.80 11.80 11.80 11.80 11.80 11.80 11.80 11.80 11.80 11.80 11.80 11.80 11.80 11.80 11.80 11.80 Gross Taxes US$/bbl Saudi Arabia 0 Iran 0 Iraq 0.91 Russia 8.44 Indonesia 1.55 US conv 5.03 Norway 0.19 US shale 6.42 Canada 2.48 Venezuela 10.48 Nigeria 4.11 Brazil 6.66 UK 0 ##### Sheet/List 11 ##### Depreciation Straight Line Total Capex 5000 Years of Production 20 Annual Depreciation (US$mm) 250 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 Depreciation 0 0 0 0 250 250 250 250 250 250 250 250 250 250 250 250 250 250 250 250 250 250 250 250 Production 0 0 0 0 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Total 5000 Unit of Production Total Reserves 667 Total Produced 610 Total Capex 5000 Depreciation per barrel 8.19 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 Depreciation 0 0 0 0 88.76697425 164 219 273 328 328 328 328 328 311 296 281 267 254 241 229 217 207 196 186 Total 5068 ##### Sheet/List 12 ##### Sensitivities Oil Price Oil Price Capex NPV 30% 5849 15% 4696 0% 3543 -15% 2390 -30% 1237 Production NPV 30% 5607 15% 4575 0% 3543 -15% 2511 -30% 1479 Production Opex Capex NPV 30% 4636 15% 4090 0% 3543 -15% 2997 -30% 2450 Opex NPV 30% 3903 15% 3723 0% 3543 -15% 3363 -30% 3183 Corporate Tax Rate Tax Rate NPV Discount Rate 10% 5184 15% 4766 20% 4349 25% 3931 30% 3513 Discount Rate NPV -30.0% 6668 -15.0% 5406 Base 4349 +15% 3427 +30% 2654 Summary Oil Price Production Capex Opex Corp Tax Disc. Rate Downside 1237 1479 2450 3183 Low 2390 2511 2997 3363 Base 3543 3543 3543 3543 High 4696 4575 4090 3723 Upside 5849 5607 4636 3903 ##### Sheet/List 13 ##### Exploration Well Analysis Chance of Success 10% Cost of Well 100 US$mm NPV of Success 3543 Dry Hole -90.0 Successful Well 344 EMV 254 ##### Sheet/List 14 ##### PSA Regime 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 Company Revenues 0 0 0 0 620 1171 1561 1084 1301 1301 1301 1301 1301 1236 1174 1115 1060 1007 956 908 863 820 779 740 Operating Costs 0 0 0 0 -54 -100 -133 -167 -200 -200 -200 -200 -200 -190 -181 -171 -163 -155 -147 -140 -133 -126 -120 -114 Transport Costs 0 0 0 0 -33 -60 -80 -100 -120 -120 -120 -120 -120 -114 -108 -103 -98 -93 -88 -84 -80 -76 -72 -68 Operating Taxes 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 EBITDA 0 0 0 0 533 1011 1348 817 981 981 981 981 981 932 885 841 799 759 721 685 651 618 587 558 Depreciation 0 0 0 0 -88.76697425 -163.8774909 -219 -273 -328 -328 -328 -328 -328 -311 -296 -281 -267 -254 -241 -229 -217 -207 -196 -186 EBIT 0 0 0 0 445 847 1129 544 653 653 653 653 653 620 589 560 532 505 480 456 433 412 391 371 Tax on EBIT 0 0 0 0 -88.94047182 -169.3793018 -226 -109 -131 -131 -131 -131 -131 -124 -118 -112 -106 -101 -96 -91 -87 -82 -78 -74 Corporate Tax Rate 20% Post tax cashflow 0 0 0 0 445 841 1122 709 850 850 850 850 850 808 767 729 693 658 625 594 564 536 509 484 CAPEX -1000 -1000 -1000 -1000 -150 -150 -150 -150 -150 -10 -10 -10 -10 -10 -10 -10 -10 -10 -10 -10 -10 -10 -10 -10 Free Cashflow (FCF) -1000 -1000 -1000 -1000 295 691 972 559 700 840 840 840 840 798 757 719 683 648 615 584 554 526 499 474 Cumulative FCF -1000 -2000 -3000 -4000 -3705 -3014 -2042 -1484 -783 57 897 1737 2578 3375 4133 4852 5534 6182 6797 7381 7935 8461 8960 9433 Discount Rate 10% Discount Factor 1.10 1.21 1.33 1.46 1.61 1.77 1.95 2.14 2.36 2.59 2.85 3.14 3.45 3.80 4.18 4.59 5.05 5.56 6.12 6.73 7.40 8.14 8.95 9.85 Discounted Cashflow (DCF) -909 -826 -751 -683 183 390 499 261 297 324 294 268 243 210 181 156 135 117 101 87 75 65 56 48 NPV ($mm) 819 IRR (%) 13% Revenue Calculation Company Govt Cost Oil 80% Profit Oil 50% 50% 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 Total Revenues 0 0 0 0 696 1314 1752 2190 2628 2628 2628 2628 2628 2497 2372 2253 2141 2033 1932 1835 1743 1656 1573 1495 Govt Royalty 0 0 0 0 7 13 18 22 26 26 26 26 26 25 24 23 21 20 19 18 17 17 16 15 1% Taxable Revenues 0 0 0 0 689 1301 1734 2168 2602 2602 2602 2602 2602 2472 2348 2231 2119 2013 1913 1817 1726 1640 1558 1480 Cost Oil 80% of Revenues 0 0 0 0 551 1041 1388 1734 2081 2081 2081 2081 2081 1977 1878 1785 1695 1611 1530 1454 1381 1312 1246 1184 Accumulated Cost Oil 0 0 0 551 1592 2980 4714 6795 8877 10958 13039 15121 17098 18977 20761 22456 24067 25597 27050 28431 29743 30989 32173 Annual Costs -1000 -1000 -1000 -237 -310 -363 -417 -470 -330 -330 -330 -330 -314 -299 -284 -271 -258 -245 -233 -222 -212 -202 -192 Accumulated Costs -1000 -2000 -3000 -3237 -3547 -3910 -4327 -4797 -5127 -5457 -5787 -6117 -6431 -6729 -7014 -7284 -7542 -7787 -8021 -8243 -8455 -8656 -8848 -1000 -2000 -3000 -2685 -1955 -930 387 1999 3750 5501 7253 9004 10668 12247 13747 15172 16525 17810 19030 20188 21288 22333 23325 Payback 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Cost Oil to Company 0 0 0 0 551 1041 1388 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Profit Oil 0 0 0 0 138 260 347 2168 2602 2602 2602 2602 2602 2472 2348 2231 2119 2013 1913 1817 1726 1640 1558 1480 Profit Oil Company 0 0 0 0 69 130 173 1084 1301 1301 1301 1301 1301 1236 1174 1115 1060 1007 956 908 863 820 779 740 Govt 0 0 0 0 69 130 173 1084 1301 1301 1301 1301 1301 1236 1174 1115 1060 1007 956 908 863 820 779 740 Total Company Revenues 0 0 0 0 620 1171 1561 1084 1301 1301 1301 1301 1301 1236 1174 1115 1060 1007 956 908 863 820 779 740 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 Company Revenues 0 0 0 0 620 1171 1561 1084 1301 1301 1301 1301 1301 1236 1174 1115 1060 1007 956 908 863 820 779 740 Govt. Revenues 0 0 0 0 76 143 191 1106 1327 1327 1327 1327 1327 1261 1198 1138 1081 1027 976 927 880 836 795 755 ##### Sheet/List 15 ##### Questions Real and Nominal 2018 2019 2020 2021 2022 2023 Q1 100 102.5 105.1 107.7 110.4 113.1 Q2 2018 2019 2020 2021 2022 2023 Real 60 60 60 60 60 60 Nominal 60 61.20 62.42 63.67 64.95 66.24 Inflation 2% Real +1% 60 60.60 61.21 61.82 62.44 63.06 NPV and DCF Q1 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 US$mm 100 100 100 100 100 100 100 100 100 100 Discount factor 1.10 1.21 1.33 1.46 1.61 1.77 1.95 2.14 2.36 2.59 Discount Rate 10% DCF 91 83 75 68 62 56 51 47 42 39 NPV 614 NPV Excel 614 Q2 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 Capex -187.5 -187.5 -187.5 -187.5 -187.5 Cashflow 100 150 200 250 300 300 300 300 300 300 270 243 219 197 177 Net Cashflow -188 -188 -188 -188 -188 100 150 200 250 300 300 300 300 300 300 270 243 219 197 177 Discount Factor 1.1 1.21 1.33 1.46 1.61 1.77 1.95 2.14 2.36 2.59 2.85 3.14 3.45 3.80 4.18 4.59 5.05 5.56 6.12 6.73 Discount Rate 10% DCF -170 -155 -141 -128 -116 56 77 93 106 116 105 96 87 79 72 59 48 39 32 26 NPV 381 NPV Excel 381 IRR 16% Cost Inflation 1.25