Time Value of Money Money 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 US$ in wallet 500 500 500 500 500 500 500 500 500 500 US$ in bank 500 525 551 579 608 638 670 704 739 776 Inflation 4% 4% 4% 4% 4% 4% 4% 4% 4% 4% Interest Rate 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 Cost of printer ink 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 US$ flat 5 5 5 5 5 5 5 5 5 5 US$ inflation 5.20 5.41 5.62 5.85 6.08 6.33 6.58 6.84 US$ Amount of printer ink 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 US$ no inflation 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 US after inflation #DIV/0! 96.2 92.5 88.9 85.5 82.2 79.0 76.0 73.1 US$ after inflation with interest #DIV/0! 101.0 101.9 102.9 103.9 104.9 105.9 106.9 108.0 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 Year 1 Year 2 Year 3 Total Real 100 100 100 100 100 Cost of plant (today) 100 100 100 300 Nominal 102.5 105.1 107.7 110.4 113.1 Cost of plant (MoD) 103 105 108 315 Inflation 2.5% 2.5% 2.5% 2.5% 2.5% Capex US$2020 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 33.78 34.46 35.15 35.85 36.57 Inflation 2% 2% 2% 2% 2% 2% 2% 2% 2% 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 Discount Factor Discounted Cashflow NPV (Net Present Value) Discount Rate Excel Calculation IRR #NUM! Example 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 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 1.08 1.16 1.24 1.34 1.44 1.54 1.66 1.78 1.92 2.06 2.22 2.38 2.56 2.75 2.96 3.18 3.42 3.68 3.95 4.25 Discounted Cashflow -186.0 -173.1 -161.0 59.9 55.7 51.8 48.2 44.9 41.7 38.8 36.1 33.6 31.2 29.1 27.0 25.2 23.4 21.8 20.2 18.8 NPV 87.4 Discount Rate 7.5% IRR 9.6% IRR Internal Rate of Return Excel Calculation 87.4 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 -186.0 -359.1 -520.1 -460.2 -404.5 -352.6 -304.4 -259.6 -217.8 -179.0 -142.9 -109.3 -78.1 -49.0 -22.0 3.2 26.6 48.3 68.6 87.4 Payback period 11 Discounted payback period 16 ##### Sheet/List 4 ##### WACC Calculation Risk Free Rate 0.00% Corporate Interest Rate 0.00% Equity market return 0.00% Company Beta 0 Corporate Tax Rate 0% Debt Equity Debt:Equity Split 0% 100% Cost of Debt 0.00% Cost of Equity 0.00% WACC 0.00% ##### Sheet/List 5 ##### An Example Conventional Oil Field Sensitivities 1 0% Base Results Oil Price 1 2 15% High NPV 10889 US$mm Production 1 3 30% Upside IRR 13% % Operating Costs & Transport 1 4 -15% Low Capex 1 5 -30% Downside 2021 2022 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 Revenues 0 0 0 0 0 403 789 1175 1545 1803 1803 1803 1803 1803 1712 1627 1545 1468 1395 1325 1259 1196 1136 1079 Operating Costs 0 0 0 0 0 -35 -68 -100 -130 -152 -152 -152 -152 -152 -144 -137 -130 -124 -117 -111 -106 -101 -96 -91 Transport Costs 0 0 0 0 0 -33 -63 -93 -120 -140 -140 -140 -140 -140 -133 -126 -120 -114 -108 -103 -98 -93 -88 -84 Operating Taxes 0 0 0 0 0 -55 -109 -164 -216 -252 -252 -252 -252 -252 -240 -228 -216 -205 -195 -185 -176 -167 -159 -151 EBITDA (Pre-tax Cashflow) 0 0 0 0 0 279 549 819 1079 1259 1259 1259 1259 1259 1196 1136 1079 1025 974 925 879 835 793 754 Depreciation 0 0 0 0 0 -78 -151 -223 -289 -337 -337 -337 -337 -337 -321 -304 -289 -275 -261 -248 -236 -224 -213 -202 Straight Line (0) or Unit of Prod (1) 1 EBIT (Pre Tax Profit) 0 0 0 0 0 201 398 596 790 921 921 921 921 921 875 831 790 750 713 677 643 611 581 552 Tax on EBIT 0 0 0 0 0 -40 -80 -119 -158 -184 -184 -184 -184 -184 -175 -166 -158 -150 -143 -135 -129 -122 -116 -110 Corporate Tax Rate 20% Post tax cashflow 0 0 0 0 0 239 469 700 921 1074 1074 1074 1074 1074 1021 970 921 875 831 790 750 713 677 643 CAPEX 0 -1000 -1000 -1000 -1000 -150 -150 -150 -150 -150 -18 -18 -18 -18 -18 -18 -18 -18 -18 -18 -18 -18 -18 -18 Free Cashflow (FCF) 0 -1000 -1000 -1000 -1000 89 319 550 771 924 1056 1056 1056 1056 1003 952 903 857 813 772 732 695 659 625 Cumulative FCF 0 -1000 -2000 -3000 -4000 -3911 -3591 -3042 -2271 -1347 -290 766 1822 2879 3881 4833 5736 6593 7406 8178 8910 9605 10264 10889 Discount Rate 0.0% Discount Factor 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Discounted Cashflow (DCF) 0 -1000 -1000 -1000 -1000 89 319 550 771 924 1056 1056 1056 1056 1003 952 903 857 813 772 732 695 659 625 NPV ($mm) 10889 IRR (%) 13.2% Payback (years) 11 When does cumulative cashflow turn positive Excel Calculation "$10,889 " Breakeven Oil Price $50.00 After Goal Seek Function in Data:What If Alternative NPV (terminal value) FCF for 10 years 0 -1000 -1000 -1000 -1000 89 319 550 771 924 1056 Terminal Value 8810 Implied FCF 0 -1000 -1000 -1000 -1000 89 319 550 771 924 1056 8810 Implied DCF 0 -1000 -1000 -1000 -1000 89 319 550 771 924 1056 8810 NPV 8520 Plus Cash 0 Less Debt 0 Total NPV 8520 IRR 16% EBITDA Multiple 7 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 Revenues 0 0 0 0 0 403 789 1175 1545 1803 1803 1803 1803 1803 1712 1627 1545 1468 1395 1325 1259 1196 1136 1079 Lifting Costs 0 0 0 0 0 -35 -68 -100 -130 -152 -152 -152 -152 -152 -144 -137 -130 -124 -117 -111 -106 -101 -96 -91 Transport 0 0 0 0 0 -33 -63 -93 -120 -140 -140 -140 -140 -140 -133 -126 -120 -114 -108 -103 -98 -93 -88 -84 Operating Taxes 0 0 0 0 0 -55 -109 -164 -216 -252 -252 -252 -252 -252 -240 -228 -216 -205 -195 -185 -176 -167 -159 -151 Corporate Tax 0 0 0 0 0 -40 -80 -119 -158 -184 -184 -184 -184 -184 -175 -166 -158 -150 -143 -135 -129 -122 -116 -110 Capex 0 -1000 -1000 -1000 -1000 -150 -150 -150 -150 -150 -18 -18 -18 -18 -18 -18 -18 -18 -18 -18 -18 -18 -18 -18 Free Cashflow 0 -1000 -1000 -1000 -1000 89 319 550 771 924 1056 1056 1056 1056 1003 952 903 857 813 772 732 695 659 625 ##### Sheet/List 6 ##### Production Oil Gas Total mmbbls kbpd Bcf mmcfd mmboe Resources 0 Recovery Factor 0% Reserves 500 1000 167 667 Start date 5 years after first capex Peak as % Reserves 5 years after first capex Peak Production (mmbbls) 35 96 7% 70 192 Time to Peak (yrs) 5 5 Length of Peak (yrs) 5 5 Decline rate (%) 5% 5% First capex 1st year Peak Oil 2021 2022 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 Oil production 0.00 0.00 0.00 0.00 0.00 7.50 15.00 22.50 30.00 35.00 35.00 35.00 35.00 35.00 33.25 31.59 30.01 28.51 27.08 25.73 24.44 23.22 22.06 20.96 Total oil produced to 2040 516.8 Barrels per day 0 0 0 0 20548 41096 61644 82192 95890 95890 95890 95890 95890 91096 86541 82214 78103 74198 70488 66964 63616 60435 57413 Gas Production 0.00 0.00 0.00 0.00 0.00 20.00 35.00 50.00 60.00 70.00 70.00 70.00 70.00 70.00 66.50 63.18 60.02 57.02 54.16 51.46 48.88 46.44 44.12 41.91 Total gas produced to 2040 1048.7 2021 2022 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 Oil Production (mmbbls) 0.0 0.0 0.0 0.0 0.0 7.5 15.0 22.5 30.0 35.0 35.0 35.0 35.0 35.0 33.3 31.6 30.0 28.5 27.1 25.7 24.4 23.2 22.1 21.0 Gas Production (mmboe) 0.0 0.0 0.0 0.0 0.0 3.3 5.8 8.3 10.0 11.7 11.7 11.7 11.7 11.7 11.1 10.5 10.0 9.5 9.0 8.6 8.1 7.7 7.4 7.0 Total (mmboe) 0.0 0.0 0.0 0.0 0.0 10.8 20.8 30.8 40.0 46.7 46.7 46.7 46.7 46.7 44.3 42.1 40.0 38.0 36.1 34.3 32.6 31.0 29.4 27.9 Production Scenarios Total Produced Oil Production Scenarios 1 516.84 2 594.37 3 671.89 4 439.31 5 361.79 Gas Production Scenarios 1 1048.68 2 1205.98 3 1363.28 4 891.38 5 734.08 ##### Sheet/List 7 ##### Revenue Calculation Export % Oil 80% Gas 0% 2021 2022 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 Oil Production 0.0 0.0 0.0 0.0 0.0 7.5 15.0 22.5 30.0 35.0 35.0 35.0 35.0 35.0 33.3 31.6 30.0 28.5 27.1 25.7 24.4 23.2 22.1 21.0 Domestic Sales 0.0 0.0 0.0 0.0 0.0 1.5 3.0 4.5 6.0 7.0 7.0 7.0 7.0 7.0 6.7 6.3 6.0 5.7 5.4 5.1 4.9 4.6 4.4 4.2 Export Sales 0.0 0.0 0.0 0.0 0.0 6.0 12.0 18.0 24.0 28.0 28.0 28.0 28.0 28.0 26.6 25.3 24.0 22.8 21.7 20.6 19.6 18.6 17.6 16.8 Domestic Oil Price 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 Export Oil Price 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 Domestic Revenue 0 0 0 0 0 38 75 113 150 175 175 175 175 175 166 158 150 143 135 129 122 116 110 105 Export Revenue 0 0 0 0 0 300 600 900 1200 1400 1400 1400 1400 1400 1330 1264 1200 1140 1083 1029 978 929 882 838 Total Oil Revenue 0 0 0 0 0 338 675 1013 1350 1575 1575 1575 1575 1575 1496 1421 1350 1283 1219 1158 1100 1045 993 943 Gas Production 0.0 0.0 0.0 0.0 0.0 20.0 35.0 50.0 60.0 70.0 70.0 70.0 70.0 70.0 66.5 63.2 60.0 57.0 54.2 51.5 48.9 46.4 44.1 41.9 Domestic Gas Price 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 Export Gas Price 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 Domestic Sales 0 0 0 0 0 20 35 50 60 70 70 70 70 70 67 63 60 57 54 51 49 46 44 42 Export Sales 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Domestic Revenue 0 0 0 0 0 65 114 163 195 228 228 228 228 228 216 205 195 185 176 167 159 151 143 136 Export Revenue 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Total Gas Revenue 0 0 0 0 0 65 114 163 195 228 228 228 228 228 216 205 195 185 176 167 159 151 143 136 Total Revenues 0 0 0 0 0 403 789 1175 1545 1803 1803 1803 1803 1803 1712 1627 1545 1468 1395 1325 1259 1196 1136 1079 Oil Production Scenarios 1 0.0 0.0 0.0 0.0 0.0 7.5 15.0 22.5 30.0 35.0 35.0 35.0 35.0 35.0 33.3 31.6 30.0 28.5 27.1 25.7 24.4 23.2 22.1 21.0 2 0.0 0.0 0.0 0.0 0.0 8.6 17.3 25.9 34.5 40.3 40.3 40.3 40.3 40.3 38.2 36.3 34.5 32.8 31.1 29.6 28.1 26.7 25.4 24.1 15% 3 0.0 0.0 0.0 0.0 0.0 9.8 19.5 29.3 39.0 45.5 45.5 45.5 45.5 45.5 43.2 41.1 39.0 37.1 35.2 33.4 31.8 30.2 28.7 27.2 30% 4 0.0 0.0 0.0 0.0 0.0 6.4 12.8 19.1 25.5 29.8 29.8 29.8 29.8 29.8 28.3 26.8 25.5 24.2 23.0 21.9 20.8 19.7 18.7 17.8 -15% 5 0.0 0.0 0.0 0.0 0.0 5.3 10.5 15.8 21.0 24.5 24.5 24.5 24.5 24.5 23.3 22.1 21.0 20.0 19.0 18.0 17.1 16.3 15.4 14.7 -30% Gas Production Scenarios 1 0.0 0.0 0.0 0.0 0.0 20.0 35.0 50.0 60.0 70.0 70.0 70.0 70.0 70.0 66.5 63.2 60.0 57.0 54.2 51.5 48.9 46.4 44.1 41.9 2 0.0 0.0 0.0 0.0 0.0 23.0 40.3 57.5 69.0 80.5 80.5 80.5 80.5 80.5 76.5 72.7 69.0 65.6 62.3 59.2 56.2 53.4 50.7 48.2 15% 3 0.0 0.0 0.0 0.0 0.0 26.0 45.5 65.0 78.0 91.0 91.0 91.0 91.0 91.0 86.5 82.1 78.0 74.1 70.4 66.9 63.5 60.4 57.4 54.5 30% 4 0.0 0.0 0.0 0.0 0.0 17.0 29.8 42.5 51.0 59.5 59.5 59.5 59.5 59.5 56.5 53.7 51.0 48.5 46.0 43.7 41.6 39.5 37.5 35.6 -15% 5 0.0 0.0 0.0 0.0 0.0 14.0 24.5 35.0 42.0 49.0 49.0 49.0 49.0 49.0 46.6 44.2 42.0 39.9 37.9 36.0 34.2 32.5 30.9 29.3 -30% Export Oil Price 10889 Base Case 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 Scenario 2 57.5 57.5 57.5 57.5 57.5 57.5 57.5 57.5 57.5 57.5 57.5 57.5 57.5 57.5 57.5 57.5 57.5 57.5 57.5 57.5 57.5 57.5 57.5 57.5 Scenario 3 65.0 65.0 65.0 65.0 65.0 65.0 65.0 65.0 65.0 65.0 65.0 65.0 65.0 65.0 65.0 65.0 65.0 65.0 65.0 65.0 65.0 65.0 65.0 65.0 Scenario 4 42.5 42.5 42.5 42.5 42.5 42.5 42.5 42.5 42.5 42.5 42.5 42.5 42.5 42.5 42.5 42.5 42.5 42.5 42.5 42.5 42.5 42.5 42.5 42.5 Scenario 5 35.0 35.0 35.0 35.0 35.0 35.0 35.0 35.0 35.0 35.0 35.0 35.0 35.0 35.0 35.0 35.0 35.0 35.0 35.0 35.0 35.0 35.0 35.0 35.0 Domestic Oil Price Base Case 25.0 25.0 25.0 25.0 25.0 25.0 25.0 25.0 25.0 25.0 25.0 25.0 25.0 25.0 25.0 25.0 25.0 25.0 25.0 25.0 25.0 25.0 25.0 25.0 Scenario 2 28.8 28.8 28.8 28.8 28.8 28.8 28.8 28.8 28.8 28.8 28.8 28.8 28.8 28.8 28.8 28.8 28.8 28.8 28.8 28.8 28.8 28.8 28.8 28.8 Scenario 3 32.5 32.5 32.5 32.5 32.5 32.5 32.5 32.5 32.5 32.5 32.5 32.5 32.5 32.5 32.5 32.5 32.5 32.5 32.5 32.5 32.5 32.5 32.5 32.5 Scenario 4 21.3 21.3 21.3 21.3 21.3 21.3 21.3 21.3 21.3 21.3 21.3 21.3 21.3 21.3 21.3 21.3 21.3 21.3 21.3 21.3 21.3 21.3 21.3 21.3 Scenario 5 17.5 17.5 17.5 17.5 17.5 17.5 17.5 17.5 17.5 17.5 17.5 17.5 17.5 17.5 17.5 17.5 17.5 17.5 17.5 17.5 17.5 17.5 17.5 17.5 Domestic Gas Price Base Case 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 3.3 Scenario 2 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 3.7 Scenario 3 4.2 4.2 4.2 4.2 4.2 4.2 4.2 4.2 4.2 4.2 4.2 4.2 4.2 4.2 4.2 4.2 4.2 4.2 4.2 4.2 4.2 4.2 4.2 4.2 Scenario 4 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 Scenario 5 2.3 2.3 2.3 2.3 2.3 2.3 2.3 2.3 2.3 2.3 2.3 2.3 2.3 2.3 2.3 2.3 2.3 2.3 2.3 2.3 2.3 2.3 2.3 2.3 Export Gas Price Base Case 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 6.5 Scenario 2 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 Scenario 3 8.5 8.5 8.5 8.5 8.5 8.5 8.5 8.5 8.5 8.5 8.5 8.5 8.5 8.5 8.5 8.5 8.5 8.5 8.5 8.5 8.5 8.5 8.5 8.5 Scenario 4 5.5 5.5 5.5 5.5 5.5 5.5 5.5 5.5 5.5 5.5 5.5 5.5 5.5 5.5 5.5 5.5 5.5 5.5 5.5 5.5 5.5 5.5 5.5 5.5 Scenario 5 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6 Slope 13% Oil and Gas Price Comparison Oil Barrel Gas mcf thousand cubic feet 1 barrel = 6 mcf energy equivalent basis Oil Price 10 20 30 40 50 60 70 80 Gas Price (equivalent) 1.67 3.33 5.00 6.67 8.33 10.00 11.67 13.33 Slope 16.7% 16.7% 16.7% 16.7% 16.7% 16.7% 16.7% 16.7% Competitive gas price Oil Price 50 50 50 50 50 50 Slope 16.7% 15% 14% 13% 12% 11% Gas Price 8.34 7.50 7.00 6.50 6.00 5.50 Discount 0% -10% -16% -22% -28% -34% ##### 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 2021 2022 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 1000 1000 1000 1000 150 150 150 150 150 18 18 18 18 18 18 18 18 18 18 18 18 18 18 Before first oil 4000 First oil to peak 750 Maintenance 252 Total 5002 Sensitivities 2 0 1150 1150 1150 1150 173 173 173 173 173 21 21 21 21 21 21 21 21 21 21 21 21 21 21 3 0 1300 1300 1300 1300 195 195 195 195 195 23 23 23 23 23 23 23 23 23 23 23 23 23 23 4 0 850 850 850 850 128 128 128 128 128 15 15 15 15 15 15 15 15 15 15 15 15 15 15 5 0 700 700 700 700 105 105 105 105 105 13 13 13 13 13 13 13 13 13 13 13 13 13 13 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 3.25 US$/boe real Total for model 2248 US$mm 2021 2022 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 US$mm 0.0 0.0 0.0 0.0 0.0 35.2 67.7 100.2 130.0 151.7 151.7 151.7 151.7 151.7 144.1 136.9 130.0 123.5 117.4 111.5 105.9 100.6 95.6 90.8 Total 2248 Base Case and Sensitivities 1 3.25 2 15% 3 30% 4 -15% 5 -30% Global Comparisons Lifting Costs Transport Lifting Transport US$/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$/mcf 2021 2022 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 Oil (US$mm) 0.0 0.0 0.0 0.0 0.0 22.5 45.0 67.5 90.0 105.0 105.0 105.0 105.0 105.0 99.8 94.8 90.0 85.5 81.2 77.2 73.3 69.7 66.2 62.9 Gas (US$mm) 0.0 0.0 0.0 0.0 0.0 10.0 17.5 25.0 30.0 35.0 35.0 35.0 35.0 35.0 33.3 31.6 30.0 28.5 27.1 25.7 24.4 23.2 22.1 21.0 Total (US$mm) 0.0 0.0 0.0 0.0 0.0 32.5 62.5 92.5 120.0 140.0 140.0 140.0 140.0 140.0 133.0 126.4 120.0 114.0 108.3 102.9 97.8 92.9 88.2 83.8 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 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 2021 2022 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 0.0 45.0 90.0 135.0 180.0 210.0 210.0 210.0 210.0 210.0 199.5 189.5 180.0 171.0 162.5 154.4 146.7 139.3 132.4 125.7 Royalty 0.0 0.0 0.0 0.0 0.0 3.4 6.8 10.1 13.5 15.8 15.8 15.8 15.8 15.8 15.0 14.2 13.5 12.8 12.2 11.6 11.0 10.4 9.9 9.4 Other 0.0 0.0 0.0 0.0 0.0 2.0 3.9 5.9 7.7 9.0 9.0 9.0 9.0 9.0 8.6 8.1 7.7 7.3 7.0 6.6 6.3 6.0 5.7 5.4 Total 0 0 0 0 0 50.4 100.7 151.0 201.2 234.8 234.8 234.8 234.8 234.8 223.0 211.9 201.3 191.2 181.7 172.6 163.9 155.7 148.0 140.6 Export Tax Cut-off point 20 US$/bbl Tax 25% above cut-off point Export Tax ($/bbl) 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 Gas Tax Export Tax 20% export revenues Royalty 0.25 US$/mcf 2021 2022 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 Export Tax 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Royalty 0 0 0 0 0 5 9 13 15 18 18 18 18 18 17 16 15 14 14 13 12 12 11 10 Total 0 0 0 0 0 5 9 13 15 18 18 18 18 18 17 16 15 14 14 13 12 12 11 10 Total Operating Taxes 0 0 0 0 0 55 109 164 216 252 252 252 252 252 240 228 216 205 195 185 176 167 159 151 Total US$/boe 5.25 5.30 5.41 5.41 5.41 5.41 5.41 5.41 5.41 5.41 5.41 5.41 5.41 5.41 5.41 5.41 5.41 5.41 Gross Taxes US$/bbl Saudi Arabia 0 Iran 0 Iraq 0.91 Russia 8.44 Indonesia 1.55 US conv 5.03 Norway 0.19 US shale 6.42 Canada 2.48 Venezuela 10.48 Nigeria 4.11 Brazil 6.66 UK 0 ##### Sheet/List 11 ##### Depreciation Straight Line Total Capex 5000 Years of Production 19 Annual Depreciation (US$mm) 263 2021 2022 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 Depreciation 0 0 0 0 0 263 263 263 263 263 263 263 263 263 263 263 263 263 263 263 263 263 263 263 Production 0 0 0 0 0 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 692 Total Capex 5000 Depreciation per barrel 7.23 2021 2022 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 Depreciation 0 0 0 0 0 78 151 223 289 337 337 337 337 337 321 304 289 275 261 248 236 224 213 202 Total 5000 ##### Sheet/List 12 ##### Sensitivities Oil Price Oil Price Capex NPV 30% 7005 15% 5677 0% 4348 -15% 3020 -30% 1692 Production NPV 30% 6988 15% 5668 0% 4349 -15% 3029 -30% 1709 Production Opex Capex NPV 30% 2855 15% 3602 0% 4349 -15% 5095 -30% 5842 Opex NPV 30% 3783 15% 4066 0% 4349 -15% 4632 -30% 4914 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 1692 1709 2855 3783 Low 3020 3029 3602 4066 Base 4348 4349 4349 4349 High 5677 5668 5095 4632 Upside 7005 6988 5842 4914 ##### Sheet/List 13 ##### Exploration Well Analysis Chance of Success 10% Cost of Well 100 US$mm NPV of Success 10889 Dry Hole -90.0 Successful Well 1079 EMV 989 ##### Sheet/List 14 ##### PSA Regime 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 Company Revenues 0 0 0 0 0 359 703 1047 1377 1606 1606 892 892 892 848 805 765 727 690 656 623 592 562 534 Operating Costs 0 0 0 0 0 -35 -68 -100 -130 -152 -152 -152 -152 -152 -144 -137 -130 -124 -117 -111 -106 -101 -96 -91 Transport Costs 0 0 0 0 0 -33 -63 -93 -120 -140 -140 -140 -140 -140 -133 -126 -120 -114 -108 -103 -98 -93 -88 -84 Operating Taxes 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 EBITDA 0 0 0 0 0 291 573 854 1127 1314 1314 601 601 601 571 542 515 489 465 441 419 398 379 360 Depreciation 0 0 0 0 0 -78.31854691 -151 -223 -289 -337 -337 -337 -337 -337 -321 -304 -289 -275 -261 -248 -236 -224 -213 -202 EBIT 0 0 0 0 0 213 422 631 837 977 977 263 263 263 250 238 226 214 204 193 184 175 166 158 Tax on EBIT 0 0 0 0 0 -42.52012395 -84 -126 -167 -195 -195 -53 -53 -53 -50 -48 -45 -43 -41 -39 -37 -35 -33 -32 Corporate Tax Rate 20% Post tax cashflow 0 0 0 0 0 248 488 728 959 1119 1119 548 548 548 521 495 470 446 424 403 383 364 345 328 CAPEX 0 -1000 -1000 -1000 -1000 -150 -150 -150 -150 -150 -18 -18 -18 -18 -18 -18 -18 -18 -18 -18 -18 -18 -18 -18 Free Cashflow (FCF) 0 -1000 -1000 -1000 -1000 98 338 578 809 969 1101 530 530 530 503 477 452 428 406 385 365 346 327 310 Cumulative FCF 0 -1000 -2000 -3000 -4000 -3902 -3563 -2985 -2176 -1207 -106 423 953 1483 1986 2462 2914 3342 3748 4133 4498 4843 5171 5481 Discount Rate 10% Discount Factor 1.10 1.21 1.33 1.46 1.61 1.77 1.95 2.14 2.36 2.59 2.85 3.14 3.45 3.80 4.18 4.59 5.05 5.56 6.12 6.73 7.40 8.14 8.95 9.85 Discounted Cashflow (DCF) 0 -826 -751 -683 -621 56 174 270 343 374 386 169 154 140 120 104 89 77 66 57 49 42 37 31 NPV ($mm) -145 IRR (%) 9% 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 0 403 789 1175 1545 1803 1803 1803 1803 1803 1712 1627 1545 1468 1395 1325 1259 1196 1136 1079 Govt Royalty 0 0 0 0 0 4 8 12 15 18 18 18 18 18 17 16 15 15 14 13 13 12 11 11 1% Taxable Revenues 0 0 0 0 0 398 781 1163 1530 1784 1784 1784 1784 1784 1695 1610 1530 1453 1381 1312 1246 1184 1125 1068 Cost Oil 80% of Revenues 0 0 0 0 0 319 625 931 1224 1428 1428 1428 1428 1428 1356 1288 1224 1163 1105 1049 997 947 900 855 Accumulated Cost Oil 0 0 0 0 319 943 1874 3098 4525 5953 7380 8808 10236 11592 12880 14104 15267 16372 17421 18418 19365 20265 21119 Annual Costs -1000 -1000 -1000 -1000 -218 -280 -343 -400 -442 -310 -310 -310 -310 -295 -281 -268 -256 -244 -232 -222 -211 -202 -193 Accumulated Costs -1000 -2000 -3000 -4000 -4218 -4498 -4841 -5241 -5682 -5992 -6302 -6611 -6921 -7216 -7497 -7765 -8021 -8265 -8497 -8719 -8930 -9132 -9325 -1000 -2000 -3000 -4000 -3899 -3554 -2967 -2143 -1157 -39 1079 2197 3315 4376 5383 6339 7246 8107 8924 9699 10435 11133 11795 Payback 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 1 1 1 1 Cost Oil to Company 0 0 0 0 0 319 625 931 1224 1428 1428 0 0 0 0 0 0 0 0 0 0 0 0 0 Profit Oil 0 0 0 0 0 80 156 233 306 357 357 1784 1784 1784 1695 1610 1530 1453 1381 1312 1246 1184 1125 1068 Profit Oil Company 0 0 0 0 0 40 78 116 153 178 178 892 892 892 848 805 765 727 690 656 623 592 562 534 Govt 0 0 0 0 0 40 78 116 153 178 178 892 892 892 848 805 765 727 690 656 623 592 562 534 Total Company Revenues 0 0 0 0 0 359 703 1047 1377 1606 1606 892 892 892 848 805 765 727 690 656 623 592 562 534 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 0 359 703 1047 1377 1606 1606 892 892 892 848 805 765 727 690 656 623 592 562 534 Govt. Revenues 0 0 0 0 0 44 86 128 168 196 196 910 910 910 865 822 780 741 704 669 636 604 574 545 ##### 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