1) A recent acquisition has the following published data. TUO&GCO recently acquired the producing assets from Hard Times Exploration for $25.6 million. Reported proved developed reserves for the transaction were 1.5MMBO, 4.2 BCF, and 300 MBNGL’s. Current net production for the transaction was 384 BOPD and 1.5 MMCFD of gas. TUO&GCO also commented in their press conference that the transaction included an additional 1.0MMBOE of proved undeveloped reserves. Calculate the following reserve and production rate based transaction metrics:
a) $/BOE, Developed and 1P b) $/MCFE, Developed and 1P c) $/BOEPD d) $/MCFD e) Estimate of R/P, the reserve Life Index. f) Developed Reserve % of Proved Reserves g) Developed to Undeveloped Reserve Ratio 2) Explain the expected impact on the 2 stream metrics in c,d,e above if 3 stream volumes were provided. 3) If the TUO&GCO transaction had a 7X CF multiple what would you estimate the yearly cash flow for the assets to be? 4) If you presented the above information to the owner of your company and the owner commented that the 7X multiple was likely higher now, would you believe the reported multiple was based on trailing twelve month cash flow or estimated future cash flow (assuming all things except production rates were consistent)?