Time Value of Money Money 500 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 US$ in wallet 500 500 500 500 500 500 500 500 500 500 US$ in bank 525 551 579 608 638 670 704 739 776 814 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 1.63 500 739 355.3406651 338.419681 322.3044581 Cost of printer ink 5 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 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 US$ Amount of printer ink Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 2029 US$ no inflation or interest 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 US after inflation 96.2 76.0 US$ after inflation with interest Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Discount Rate = cost of money 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% Inflation Factor 1.025 1.051 1.077 1.104 1.131 Capex US$2020 500 Nominal 538.8 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 Nominal 30.60 31.21 31.84 32.47 33.12 Inflation 2% 2% 2% 2% 2% Inflation Factor 1.020 1.040 1.061 1.082 1.104 ##### 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 -10 -10 -10 20 20 20 20 20 20 20 Discount Factor 1.05 1.10 1.16 1.22 1.28 1.34 1.41 1.48 1.55 1.63 Discounted Cashflow -9.5 -9.1 -8.6 16.5 15.7 14.9 14.2 13.5 12.9 12.3 NPV (Net Present Value) 72.7 Discount Rate 5.0% Excel Calculation 72.7 IRR 41.3% 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 1.05 1.10 1.16 1.22 1.28 1.34 1.41 1.48 1.55 1.63 1.71 1.80 1.89 1.98 2.08 2.18 2.29 2.41 2.53 2.65 Discounted Cashflow -190.5 -181.4 -172.8 65.8 62.7 59.7 56.9 54.1 51.6 49.1 46.8 44.5 42.4 40.4 38.5 36.6 34.9 33.2 31.7 30.2 NPV 234.5 Discount Rate 5.0% IRR 9.57% IRR Internal Rate of Return Excel Calculation 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 Disc Cum Cashflow -190.5 -371.9 -544.6 -478.8 -416.2 -356.5 -299.6 -245.5 -193.9 -144.8 -98.0 -53.4 -11.0 29.4 67.9 104.5 139.4 172.7 204.3 234.5 Payback period Discounted payback period ##### 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 100% 0% 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 2255 US$mm Production 1 3 30% Upside IRR 17% % 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 0 397 920 1380 1840 2300 2300 2300 2300 2300 2185 2075 1972 1873 1779 1690 1606 1526 1449 1377 1308 Operating Costs 0 0 0 0 -36 -82 -124 -165 -206 -206 -206 -206 -206 -196 -186 -177 -168 -159 -151 -144 -137 -130 -123 -117 Transport Costs 0 0 0 0 -22 -50 -75 -100 -124 -124 -124 -124 -124 -118 -112 -107 -101 -96 -91 -87 -83 -78 -74 -71 Operating Taxes 0 0 0 0 -65 -147 -221 -295 -369 -369 -369 -369 -369 -350 -333 -316 -300 -285 -271 -257 -245 -232 -221 -210 EBITDA (Pre-tax Cashflow) 0 0 0 0 274 640 960 1280 1600 1600 1600 1600 1600 1520 1444 1372 1304 1238 1176 1118 1062 1009 958 910 Depreciation 0 0 0 0 -60 -137 -205 -273 -342 -342 -342 -342 -342 -325 -308 -293 -278 -264 -251 -239 -227 -215 -205 -194 Straight Line (0) or Unit of Prod (1) 1 EBIT (Post Tax Profit) 0 0 0 0 214 503 755 1007 1259 1259 1259 1259 1259 1196 1136 1079 1025 974 925 879 835 793 754 716 Tax on EBIT 0 0 0 0 -43 -101 -151 -201 -252 -252 -252 -252 -252 -239 -227 -216 -205 -195 -185 -176 -167 -159 -151 -143 Corporate Tax Rate 20% Post tax cashflow 0 0 0 0 231 539 809 1079 1349 1349 1349 1349 1349 1281 1217 1156 1099 1044 991 942 895 850 808 767 CAPEX -500 -1000 -1000 -750 -600 -255 -255 -255 -262 -18 -18 -17 -17 -17 -17 -17 -17 -17 -17 -17 -17 -17 -17 -17 Free Cashflow (FCF) -500 -1000 -1000 -750 -369 284 554 824 1087 1331 1331 1332 1332 1264 1200 1139 1082 1027 974 925 878 833 791 750 Cumulative FCF -500 -1500 -2500 -3250 -3619 -3334 -2780 -1956 -869 462 1792 3124 4456 5720 6920 8060 9141 10168 11142 12067 12945 13778 14568 15319 Discount Rate 10.0% 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) -455 -826 -751 -512 -229 161 284 384 461 513 466 424 386 333 287 248 214 185 159 137 119 102 88 76 NPV ($mm) 2255 IRR (%) 17.0% Payback (years) 10 When does cumulative cashflow turn positive Excel Calculation Breakeven Oil Price $70.00 After Goal Seek Function in Data:What If Alternative NPV (terminal value) FCF for 10 years -454.5454545 -1000 -1000 -750 -369 284 554 824 1087 1331 1331 Terminal Value 11203 Implied FCF -454.5454545 -1000 -1000 -750 -369 284 554 824 1087 1331 1331 11203 Implied DCF -413.2231405 -826 -751 -512 -229 161 284 384 461 513 466 3570 NPV 3107 Plus Cash 0 Less Debt 0 Total NPV 3107 IRR 21% 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 0 397 920 1380 1840 2300 2300 2300 2300 2300 2185 2075 1972 1873 1779 1690 1606 1526 1449 1377 1308 Lifting Costs 0 0 0 0 -36 -82 -124 -165 -206 -206 -206 -206 -206 -196 -186 -177 -168 -159 -151 -144 -137 -130 -123 -117 Transport 0 0 0 0 -22 -50 -75 -100 -124 -124 -124 -124 -124 -118 -112 -107 -101 -96 -91 -87 -83 -78 -74 -71 Operating Taxes 0 0 0 0 -65 -147 -221 -295 -369 -369 -369 -369 -369 -350 -333 -316 -300 -285 -271 -257 -245 -232 -221 -210 Corporate Tax 0 0 0 0 -43 -101 -151 -201 -252 -252 -252 -252 -252 -239 -227 -216 -205 -195 -185 -176 -167 -159 -151 -143 Capex -500 -1000 -1000 -750 -600 -255 -255 -255 -262 -18 -18 -17 -17 -17 -17 -17 -17 -17 -17 -17 -17 -17 -17 -17 Free Cashflow -500 -1000 -1000 -750 -369 284 554 824 1087 1331 1331 1332 1332 1264 1200 1139 1082 1027 974 925 878 833 791 750 ##### 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% 1 p 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 5.00 12.00 18.00 24.00 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 454.8 Barrels per day 0 0 0 13699 32877 49315 65753 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 12.00 24.00 36.00 48.00 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 875.6 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 5.0 12.0 18.0 24.0 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 2.0 4.0 6.0 8.0 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 7.0 16.0 24.0 32.0 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 1 454.78 2 523.00 3 591.22 4 386.57 5 318.35 Gas Production Scenarios 1 911.57 2 1048.30 3 1185.04 4 774.83 5 638.10 ##### 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 5.0 12.0 18.0 24.0 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 1.0 2.4 3.6 4.8 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 4.0 9.6 14.4 19.2 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 35 35 35 35 35 35 35 35 35 35 35 35 35 35 35 35 35 35 35 35 35 35 35 35 Export Oil Price 70 70 70 70 70 70 70 70 70 70 70 70 70 70 70 70 70 70 70 70 70 70 70 70 Domestic Revenue 0 0 0 0 35 84 126 168 210 210 210 210 210 200 190 180 171 162 154 147 139 132 126 119 Export Revenue 0 0 0 0 280 672 1008 1344 1680 1680 1680 1680 1680 1596 1516 1440 1368 1300 1235 1173 1115 1059 1006 956 Total Oil Revenue 0 0 0 0 315 756 1134 1512 1890 1890 1890 1890 1890 1796 1706 1620 1539 1462 1389 1320 1254 1191 1132 1075 Gas Production 0.0 0.0 0.0 0.0 12.0 24.0 36.0 48.0 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 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 Export Gas Price 9.1 9.1 9.1 9.1 9.1 9.1 9.1 9.1 9.1 9.1 9.1 9.1 9.1 9.1 9.1 9.1 9.1 9.1 9.1 9.1 9.1 9.1 9.1 9.1 Domestic Sales 0 0 0 0 6 12 18 24 30 30 30 30 30 29 27 26 24 23 22 21 20 19 18 17 Export Sales 0 0 0 0 6 12 18 24 30 30 30 30 30 29 27 26 24 23 22 21 20 19 18 17 Domestic Revenue 0 0 0 0 27 55 82 109 137 137 137 137 137 130 123 117 111 106 100 95 91 86 82 78 Export Revenue 0 0 0 0 55 109 164 218 273 273 273 273 273 259 246 234 222 211 201 191 181 172 163 155 Total Gas Revenue 0 0 0 0 82 164 246 328 410 410 410 410 410 389 370 351 334 317 301 286 272 258 245 233 Total Revenues 0 0 0 0 397 920 1380 1840 2300 2300 2300 2300 2300 2185 2075 1972 1873 1779 1690 1606 1526 1449 1377 1308 Oil Production Scenarios 1 0.0 0.0 0.0 0.0 5.0 12.0 18.0 24.0 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 5.8 13.8 20.7 27.6 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 6.5 15.6 23.4 31.2 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 4.3 10.2 15.3 20.4 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 3.5 8.4 12.6 16.8 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 12.0 24.0 36.0 48.0 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 13.8 27.6 41.4 55.2 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 15.6 31.2 46.8 62.4 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 10.2 20.4 30.6 40.8 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 8.4 16.8 25.2 33.6 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 2255 Base Case 70.0 70.0 70.0 70.0 70.0 70.0 70.0 70.0 70.0 70.0 70.0 70.0 70.0 70.0 70.0 70.0 70.0 70.0 70.0 70.0 70.0 70.0 70.0 70.0 Scenario 2 80.5 80.5 80.5 80.5 80.5 80.5 80.5 80.5 80.5 80.5 80.5 80.5 80.5 80.5 80.5 80.5 80.5 80.5 80.5 80.5 80.5 80.5 80.5 80.5 Scenario 3 91.0 91.0 91.0 91.0 91.0 91.0 91.0 91.0 91.0 91.0 91.0 91.0 91.0 91.0 91.0 91.0 91.0 91.0 91.0 91.0 91.0 91.0 91.0 91.0 Scenario 4 59.5 59.5 59.5 59.5 59.5 59.5 59.5 59.5 59.5 59.5 59.5 59.5 59.5 59.5 59.5 59.5 59.5 59.5 59.5 59.5 59.5 59.5 59.5 59.5 Scenario 5 49.0 49.0 49.0 49.0 49.0 49.0 49.0 49.0 49.0 49.0 49.0 49.0 49.0 49.0 49.0 49.0 49.0 49.0 49.0 49.0 49.0 49.0 49.0 49.0 Domestic Oil Price Base Case 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 Scenario 2 40.3 40.3 40.3 40.3 40.3 40.3 40.3 40.3 40.3 40.3 40.3 40.3 40.3 40.3 40.3 40.3 40.3 40.3 40.3 40.3 40.3 40.3 40.3 40.3 Scenario 3 45.5 45.5 45.5 45.5 45.5 45.5 45.5 45.5 45.5 45.5 45.5 45.5 45.5 45.5 45.5 45.5 45.5 45.5 45.5 45.5 45.5 45.5 45.5 45.5 Scenario 4 29.8 29.8 29.8 29.8 29.8 29.8 29.8 29.8 29.8 29.8 29.8 29.8 29.8 29.8 29.8 29.8 29.8 29.8 29.8 29.8 29.8 29.8 29.8 29.8 Scenario 5 24.5 24.5 24.5 24.5 24.5 24.5 24.5 24.5 24.5 24.5 24.5 24.5 24.5 24.5 24.5 24.5 24.5 24.5 24.5 24.5 24.5 24.5 24.5 24.5 Domestic Gas Price Base Case 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 Scenario 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 5.2 Scenario 3 5.9 5.9 5.9 5.9 5.9 5.9 5.9 5.9 5.9 5.9 5.9 5.9 5.9 5.9 5.9 5.9 5.9 5.9 5.9 5.9 5.9 5.9 5.9 5.9 Scenario 4 3.9 3.9 3.9 3.9 3.9 3.9 3.9 3.9 3.9 3.9 3.9 3.9 3.9 3.9 3.9 3.9 3.9 3.9 3.9 3.9 3.9 3.9 3.9 3.9 Scenario 5 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 3.2 Export Gas Price Base Case 9.1 9.1 9.1 9.1 9.1 9.1 9.1 9.1 9.1 9.1 9.1 9.1 9.1 9.1 9.1 9.1 9.1 9.1 9.1 9.1 9.1 9.1 9.1 9.1 Scenario 2 10.5 10.5 10.5 10.5 10.5 10.5 10.5 10.5 10.5 10.5 10.5 10.5 10.5 10.5 10.5 10.5 10.5 10.5 10.5 10.5 10.5 10.5 10.5 10.5 Scenario 3 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 11.8 Scenario 4 7.7 7.7 7.7 7.7 7.7 7.7 7.7 7.7 7.7 7.7 7.7 7.7 7.7 7.7 7.7 7.7 7.7 7.7 7.7 7.7 7.7 7.7 7.7 7.7 Scenario 5 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 6.4 Slope 13% ##### Sheet/List 8 ##### Capital Expenditure Reserves 667 Capex per bbl 7.70 Total capex 5133 % before first oil 75% 3850 770 % first oil to peak 20% 1027 Maintenance capex 5% 257 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 500 1000 1000 750 600 255 255 255 262 18 18 17 17 17 17 17 17 17 17 17 17 17 17 17 Before first oil 3850 First oil to peak 1027 Maintenance 257 Total 5134 Sensitivities 2 575 1150 1150 863 690 293 293 293 301 21 21 20 20 20 20 20 20 20 20 20 20 20 20 20 3 650 1300 1300 975 780 332 332 332 341 23 23 22 22 22 22 22 22 22 22 22 22 22 22 22 4 425 850 850 638 510 217 217 217 223 15 15 14 14 14 14 14 14 14 14 14 14 14 14 14 5 350 700 700 525 420 179 179 179 183 13 13 12 12 12 12 12 12 12 12 12 12 12 12 12 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 5.15 US$/boe real Total for model 3094 US$mm 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$mm 0.0 0.0 0.0 0.0 36.1 82.4 123.6 164.8 206.0 206.0 206.0 206.0 206.0 195.7 185.9 176.6 167.8 159.4 151.4 143.9 136.7 129.8 123.3 117.2 Total 3125 Base Case and Sensitivities 1 5.15 2 15% 3 30% 4 -15% 5 -30% Global Comparisons Lifting Costs Transport Lifting Transport US$/bbl US$/bbl Iran 1.94 Saudi Arabia 2.49 Iraq 2.16 Iran 2.67 Russia 2.98 Iraq 2.47 Saudi Arabia 3.00 Russia 2.69 Norway 4.24 Indonesia 3.63 US conv 5.15 US conv 3.11 US shale 5.85 Norway 3.12 Indonesia 6.87 US shale 3.52 Venezuela 7.94 Canada 2.92 Nigeria 8.81 Venezuela 2.54 Brazil 9.45 Nigeria 2.97 Canada 11.56 Brazil 2.80 UK 17.36 UK 4.30 Company examples Rosneft 3.10 Lukoil 4.26 BP 6.90 Chesapeake 2.92 Transport Costs Oil 3.11 US$/bbl Gas 0.52 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 15.6 37.3 56.0 74.6 93.3 93.3 93.3 93.3 93.3 88.6 84.2 80.0 76.0 72.2 68.6 65.2 61.9 58.8 55.9 53.1 Gas (US$mm) 0.0 0.0 0.0 0.0 6.2 12.4 18.7 24.9 31.1 31.1 31.1 31.1 31.1 29.5 28.1 26.7 25.3 24.1 22.9 21.7 20.6 19.6 18.6 17.7 Total (US$mm) 0.0 0.0 0.0 0.0 21.8 49.8 74.6 99.5 124.4 124.4 124.4 124.4 124.4 118.2 112.3 106.7 101.3 96.3 91.4 86.9 82.5 78.4 74.5 70.8 Base Case and Sensitivities 1 3.11 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 70 70 70 70 70 70 70 70 70 70 70 70 70 70 70 70 70 70 70 70 70 70 70 70 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 0.0 0.0 40.0 96.0 144.0 192.0 240.0 240.0 240.0 240.0 240.0 228.0 216.6 205.8 195.5 185.7 176.4 167.6 159.2 151.3 143.7 136.5 Royalty 0.0 0.0 0.0 0.0 3.2 7.6 11.3 15.1 18.9 18.9 18.9 18.9 18.9 18.0 17.1 16.2 15.4 14.6 13.9 13.2 12.5 11.9 11.3 10.8 Other 0.0 0.0 0.0 0.0 2.0 4.6 6.9 9.2 11.5 11.5 11.5 11.5 11.5 10.9 10.4 9.9 9.4 8.9 8.5 8.0 7.6 7.2 6.9 6.5 Total 0 0 0 0 45.1 108.2 162.2 216.3 270.4 270.4 270.4 270.4 270.4 256.9 244.0 231.8 220.2 209.2 198.8 188.8 179.4 170.4 161.9 153.8 Export Tax Cut-off point 30 US$/bbl Tax 25% above cut-off point Export Tax ($/bbl) 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 Gas Tax Export Tax 25% export revenues Royalty 0.5 US$/mcf 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 Export Tax 0 0 0 0 14 27 41 55 68 68 68 68 68 65 62 59 56 53 50 48 45 43 41 39 Royalty 0 0 0 0 6 12 18 24 30 30 30 30 30 29 27 26 24 23 22 21 20 19 18 17 Total 0 0 0 0 20 39 59 79 98 98 98 98 98 93 89 84 80 76 72 69 65 62 59 56 Total Operating Taxes 0 0 0 0 65 147 221 295 369 369 369 369 369 350 333 316 300 285 271 257 245 232 221 210 Total US$/boe 9.22 9.22 9.22 9.22 9.22 9.22 9.22 9.22 9.22 9.22 9.22 9.22 9.22 9.22 9.22 9.22 9.22 9.22 Gross Taxes US$/bbl Saudi Arabia 0 Iran 0 Iraq 0.91 Russia 8.44 Indonesia 1.55 US conv 5.03 Norway 0.19 US shale 6.42 Canada 2.48 Venezuela 10.48 Nigeria 4.11 Brazil 6.66 UK 0 ##### Sheet/List 11 ##### Depreciation Straight Line Total Capex 5133 Years of Production 20 Annual Depreciation (US$mm) 257 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 0 257 257 257 257 257 257 257 257 257 257 257 257 257 257 257 257 257 257 257 257 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 5133 Unit of Production Total Reserves 667 Total Produced 601 Total Capex 5133 Depreciation per barrel 8.55 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 Depreciation 0 0 0 0 60 137 205 273 342 342 342 342 342 325 308 293 278 264 251 239 227 215 205 194 Total 5185 ##### 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$mm NPV of Success 2255 Dry Hole -90.0 Successful Well 216 EMV 126 ##### Sheet/List 14 ##### PSA Regime 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 Company Revenues 0 0 0 0 354 820 1229 1639 1138 1138 1138 1138 1138 1081 1027 976 927 881 837 795 755 717 682 647 Operating Costs 0 0 0 0 -36 -82 -124 -165 -206 -206 -206 -206 -206 -196 -186 -177 -168 -159 -151 -144 -137 -130 -123 -117 Transport Costs 0 0 0 0 -22 -50 -75 -100 -124 -124 -124 -124 -124 -118 -112 -107 -101 -96 -91 -87 -83 -78 -74 -71 Operating Taxes 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 EBITDA 0 0 0 0 296 687 1031 1375 808 808 808 808 808 767 729 693 658 625 594 564 536 509 484 460 Depreciation 0 0 0 0 -59.81791196 -136.7266559 -205 -273 -342 -342 -342 -342 -342 -325 -308 -293 -278 -264 -251 -239 -227 -215 -205 -194 EBIT 0 0 0 0 236 551 826 1101 466 466 466 466 466 443 421 400 380 361 343 325 309 294 279 265 Tax on EBIT 0 0 0 0 -47.19999761 -110.1310288 -165 -220 -93 -93 -93 -93 -93 -89 -84 -80 -76 -72 -69 -65 -62 -59 -56 -53 Corporate Tax Rate 20% Post tax cashflow 0 0 0 0 249 577 866 1155 715 715 715 715 715 679 645 613 582 553 525 499 474 450 428 406 CAPEX -500 -1000 -1000 -750 -600 -255 -255 -255 -262 -18 -18 -17 -17 -17 -17 -17 -17 -17 -17 -17 -17 -17 -17 -17 Free Cashflow (FCF) -500 -1000 -1000 -750 -351 322 611 900 453 697 697 698 698 662 628 596 565 536 508 482 457 433 411 389 Cumulative FCF -500 -1500 -2500 -3250 -3601 -3279 -2668 -1769 -1316 -619 77 775 1472 2134 2762 3358 3923 4459 4967 5450 5907 6340 6751 7140 Discount Rate 10% Discount Factor 1.10 1.21 1.33 1.46 1.61 1.77 1.95 2.14 2.36 2.59 2.85 3.14 3.45 3.80 4.18 4.59 5.05 5.56 6.12 6.73 7.40 8.14 8.95 9.85 Discounted Cashflow (DCF) -455 -826 -751 -512 -218 182 313 420 192 269 244 222 202 174 150 130 112 96 83 72 62 53 46 40 NPV ($mm) 299 IRR (%) 11% 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 0 397 920 1380 1840 2300 2300 2300 2300 2300 2185 2075 1972 1873 1779 1690 1606 1526 1449 1377 1308 Govt Royalty 0 0 0 0 4 9 14 18 23 23 23 23 23 22 21 20 19 18 17 16 15 14 14 13 1% Taxable Revenues 0 0 0 0 393 911 1366 1821 2277 2277 2277 2277 2277 2163 2055 1952 1854 1762 1673 1590 1510 1435 1363 1295 Cost Oil 80% of Revenues 0 0 0 0 314 728 1093 1457 1821 1821 1821 1821 1821 1730 1644 1561 1483 1409 1339 1272 1208 1148 1090 1036 Accumulated Cost Oil 0 0 0 314 1043 2136 3593 5414 7235 9056 10877 12699 14429 16072 17634 19117 20526 21865 23137 24345 25493 26583 27619 Annual Costs -1000 -1000 -750 -658 -387 -453 -519 -592 -348 -348 -347 -347 -331 -315 -300 -286 -273 -260 -248 -236 -225 -215 -205 Accumulated Costs -1000 -2000 -2750 -3408 -3795 -4248 -4768 -5360 -5708 -6057 -6404 -6752 -7082 -7398 -7698 -7984 -8257 -8517 -8764 -9000 -9226 -9441 -9645 -1000 -2000 -2750 -3093 -2752 -2113 -1175 54 1527 2999 4473 5947 7346 8675 9936 11133 12270 13349 14373 15345 16267 17143 17974 Payback 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Cost Oil to Company 0 0 0 0 314 728 1093 1457 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Profit Oil 0 0 0 0 79 182 273 364 2277 2277 2277 2277 2277 2163 2055 1952 1854 1762 1673 1590 1510 1435 1363 1295 Profit Oil Company 0 0 0 0 39 91 137 182 1138 1138 1138 1138 1138 1081 1027 976 927 881 837 795 755 717 682 647 Govt 0 0 0 0 39 91 137 182 1138 1138 1138 1138 1138 1081 1027 976 927 881 837 795 755 717 682 647 Total Company Revenues 0 0 0 0 354 820 1229 1639 1138 1138 1138 1138 1138 1081 1027 976 927 881 837 795 755 717 682 647 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 0 354 820 1229 1639 1138 1138 1138 1138 1138 1081 1027 976 927 881 837 795 755 717 682 647 Govt. Revenues 0 0 0 0 43 100 150 201 1161 1161 1161 1161 1161 1103 1048 996 946 899 854 811 770 732 695 661 ##### 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