INPUTS AND ASSUMPTIONS INPUTS EXPLORATION (KES million) CAPEX (KES million) Reserves (Mbbl) Recovery % Price (US$/bbl) Exchange Rate (USD:KES) Recoverable Oil (Mbbl) Variable production cost (KES/bbl) CPI Average annual Inflation % Real price escalation rate % Real cost escalation rate % 50,000 150,000 400 96.00% 68.00 0.01 Income Tax rate (non-resident) 37.50% Percentage Debt Corporate Debt Rate Corporate income tax % Royalty Rate Cost oil Cap Corporate Discount Rate % Government Discount Rate % 30.00% Profit Oil Split Stage 1: 0-20,000 bbl/day Stage 2: Next 30,000 bbl/day Stage 3: Above 50,000 bbl/day YEAR General inflator Real price escalator Real cost escalator 2,000 1.50% 6.50% -4.00% 1.00% 37.50% (Non-Resident) 5.00% 60.00% 9.50% 2.20% Government 50% 65% 80% Contractor 50% 35% 20% 0 1 Target / actual capital structure Market cap of Holding Company (A$'bn) Attributable net debt (A$'bn) Enterprise value (A$'bn) Equity Debt Beta Geared Beta (of proxy or comparative Co) Ungeared Beta (of proxy or comparative Co) Target capital structure operation Opeartion net debt (A$'m) - Gross (A$'m) - Permanent cash (A$'m) Equity Net debt Total capital Regeared Beta according to adjusted target capital structure WACC 2 pre tax post tax Cost of equity - Rf (GTAUD10Y:GOV) - Market risk premium - Beta Cost of debt LIBOR - Pre-tax (LIBOR plus 300bp) - After-tax Nominal WACC after tax Project adjustment Nominal WACC after tax Nominal WACC pre-tax Real WACC after tax YEAR Real, after tax discount rate 0 1 2 3 4 5 6 7 8 3 4 5 6 7 8 9 9 YEAR 0 1 Cost Recovery Production (Mbbl) Cumulative Production (Mbbl) Realised Price ($US/bbl) Gross Revenue ($ million) ROYALTY ($ million) OPERERATING EXP. ($ million) EXPLORATION EXPENDITURE ($ million) DEPRECIATION Total Cost Recovery ($ million) Cost Recovery (Mbbl) Cost Recovery as % Production Maximum Cost Oil (Mbbl) COST OIL (Mbbl) Cost Recovery Carry Forward (Mbbl) Cumulative Carry Forward (Mbbl) PROFIT OIL (Mbbl) Profit Oil (bbl/day) Government Share of Profit Oil PSC Stage 1 (Mbbl) PSC Stage 2 (Mbbl) PSC Stage 3 (Mbbl) TOTAL GOVERNMENT PROFIT OIL (Mbbl) TOTAL CONTRACTOR PROFIT OIL (Mbbl) bbl/day 20,000 50,000 2 3 4 5 6 7 8 9 YEAR Contractor Realised Price ($US/bbl) Contractor Share of Profit Oil Cost Oil TOTAL REVENUE ($ million) Royalty ($ million) OPERERATING EXP. ($ million) Exploration Expenditure ($ million) Depreciation Interest Expense PROFIT BEFORE TAX ($ million) Less: TAX ($ million) PRODUCTION PROFIT AFTER TAX ($ million) Addback: Depreciation CAPEX ($ million) Debt Facility ($ million) NET CASH FLOW - NCF - ($ million) Discount Factor PRESENT VALUE OF NCF ($ million) CUMULATIVE DCF ($ million) NPV ($ million) 0 1 2 3 4 5 6 7 8 9 YEAR Government Realised Price ($US/bbl) Government Share of Profit Oil Profit Oil Revenue ($ million) Royalty ($ million) Corporate Income Tax Revenue ($ million) TOTAL REVENUE ($ million) NET CASH FLOW - NCF - ($ million) Discount Factor PRESENT VALUE OF NCF ($ million) CUMULATIVE DCF ($ million) NPV ($ million) 0 1 2 3 4 5 6 7 8 9
