INPUT OUTPUT/RESULTS Income Tax Calculation 25% 100% WI Share MM$/yr 10,000 bbl/day 1% Working interest Gross production Shrinkage Price at terminal Transportation cost from field to terminal Royalties Operating Cash Flow BIT Interest DD&A (Tax) Taxable Income Income Tax MMS/yr MMS/yr MMS/yr MM$/yr 65 2 For Operating Cashflow Before Income Tax $/bbl $/bbl of gross sales revenue Gross Production per year Production Shrinkage Gross Production after Shrinkage Gross Sales Revenue Royalties Net Revenue State and Local Taxes Operating Expense Operating Cash Flow BIT (before income tax Interest MM bbl/yr MM bbl/yr MM bbl/yr MMS/yr MMS/yr MMS/yr MMS/yr MM$/yr 15% Interest Deduction Limit 0.0 MMS/yr State and local taxes 5% 75 of net sales revenue MM$ OPEX MMS/yr Interest Expense 3 MM$ MMS/yr DD&A (Tax) 25 MM$ MMS/yr For tax calcs Income tax rate 20% MMS/yr Deferred Taxes Paid 4 MM$ MMS/yr Income Tax Payments (after deduction of Paid Deferred Taxes) Operating Cash Flow AIT (after Income Tax) Capital Expense Free Cash Flow (Operating cash flow AIT and after Capex) Loan Principle Payback Net Cash Flow (after payment of loan principal payback) CAPEX 50 MM$ MMS/yr Loan principal payback 5 MM$ MM$/yr MMS/yr