The financial analysis is to be completed in Excel. The file is to be easily adjustable for different scenarios and all inputs must be in the one sheet called Assumptions with the analysis of each well conducted on a separate sheet. 
^1 Contract specifies that this is a fixed price of gas at the wellhead over the life of project. ^2 in a given year, State Royalties ($) = State Royalties (%) x (Revenue - Allowed Extraction Costs). Allowable Extraction Costs include operating expenses and depreciation but exlcudes the well capping and rehibilitation expense. ^3 State Royalties are tax deductible. ^4 Tax is paid in the year of income. Note that it is assumed that any tax loses in any year will offset tax gains within the Primitive Energy tax consolidated group. 15 Capital expenditure on wells is recorded at the start of year in which the well is drilled. ^6 Wells must operate for stated life to ensure well pressure is sufficiently low for well capping. ^7 All revenues and operating expenses are assumed to occur at the end of given year. 18 Straight Line depreciation method (depreciating down to zero over the life of the well). 19 Wages and other operating expenses are all captured by the operating cost per GJ. ^10 Given the nature of the project, supply and servicing contracts, project has no working capital requirements. ^11 Wells drilled in years as indicated. Capital expenditure recorded at the beginning of the year. For example, the beginning of Year 1 corresponds to the 0 column. Gas Drilling Information Sheet General Information Total Reserve Size (gigajoules - GJs) Price per gigajoule of production State Royalties Tax Required Rate of Return Information Notes 250,000,000 4.45 -1 10.00% -2,^3 30.00% 14 11.00% 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Information Notes 3,000,000 45 10 16 517,231 744,250 486,064 288,770 156,061 76,722 34,311 13,958 5,165 1,739 Vertical Well Drilling Information Capital expenditure ($s per well) Well life (years) Well salvage ($s per well) Well capping and rehabilitation expense ($s per well) Well production profile (GJs per well) Well depreciation method Well operating costs ($s per GJ) Working Capital Wells drilled in given years and their operating life Wells drilled at the beginning of Year 1 Wells drilled at the beginning of Year 2 Wells drilled at the beginning of Year 3 Wells drilled at the beginning of Year 4 Wells drilled at the beginning of Year 5 Wells in operation Wells capped 300,000 47 17 straightline ^7, 18 1 ^7,49 410 17,411 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 100 -20 20 20 20 20 20 20 20 20 20 20 20 60 20 40 60 80 100 100 100 100 100 40 20 80 -20 -20 -20 -20 ^1 Contract specifies that this is a fixed price of gas at the wellhead over the life of project. ^2 in a given year, State Royalties ($) = State Royalties (%) x (Revenue - Allowed Extraction Costs). Allowable Extraction Costs include operating expenses and depreciation but exlcudes the well capping and rehibilitation expense. ^3 State Royalties are tax deductible. ^4 Tax is paid in the year of income. Note that it is assumed that any tax loses in any year will offset tax gains within the Primitive Energy tax consolidated group. 15 Capital expenditure on wells is recorded at the start of year in which the well is drilled. ^6 Wells must operate for stated life to ensure well pressure is sufficiently low for well capping. ^7 All revenues and operating expenses are assumed to occur at the end of given year. 18 Straight Line depreciation method (depreciating down to zero over the life of the well). 19 Wages and other operating expenses are all captured by the operating cost per GJ. ^10 Given the nature of the project, supply and servicing contracts, project has no working capital requirements. ^11 Wells drilled in years as indicated. Capital expenditure recorded at the beginning of the year. For example, the beginning of Year 1 corresponds to the 0 column. Gas Drilling Information Sheet General Information Total Reserve Size (gigajoules - GJs) Price per gigajoule of production State Royalties Tax Required Rate of Return Information Notes 250,000,000 4.45 -1 10.00% -2,^3 30.00% 14 11.00% 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Information Notes 3,000,000 45 10 16 517,231 744,250 486,064 288,770 156,061 76,722 34,311 13,958 5,165 1,739 Vertical Well Drilling Information Capital expenditure ($s per well) Well life (years) Well salvage ($s per well) Well capping and rehabilitation expense ($s per well) Well production profile (GJs per well) Well depreciation method Well operating costs ($s per GJ) Working Capital Wells drilled in given years and their operating life Wells drilled at the beginning of Year 1 Wells drilled at the beginning of Year 2 Wells drilled at the beginning of Year 3 Wells drilled at the beginning of Year 4 Wells drilled at the beginning of Year 5 Wells in operation Wells capped 300,000 47 17 straightline ^7, 18 1 ^7,49 410 17,411 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 100 -20 20 20 20 20 20 20 20 20 20 20 20 60 20 40 60 80 100 100 100 100 100 40 20 80 -20 -20 -20 -20
