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Very solid numbers, a bit conservative even I would think, I like it! Even at the minimum rate the company will have gas sales above $2.5 mln/month, which will allow then to repay all outstanding liabilities and build up cash quickly. At the end of Q3, the key outstanding liabilities were $1 mln debt repayment in Q4, a $2.5 mln overdraft facility and a $4.1 cash call from the operator (for 2017 activities). I expect the company to have repaid most of these by now, with everything settled in the next few weeks. Very much looking forward to the next announcement!! What will it be? - Production reaches 80 MMscf/d? - A Mnazi Bay reserves increase following the latest CPR? - Drilling plans for Mnazi Bay? Or best of all, more details about the Tembo farm out.... I All looking very good for 2018!
mick: Not sure how you have calculated the potential for $2.5m gas sales per month, but my rough calcs would be closer to $1.70m per month for 2018, assuming top end of guidance at 75mmscfs per day - from: Avg price per mmscf for Q1- Q3,2017= $9.2m/(45*273 days) = $749 Top end of guidance for 2018 - 75 mmscf/day = 365*75*749 = $20.5m, or $1.70m per month. (Assuming stable gas prices) Using $749/mmscf/d should yield approx $13.4m for full year 2017 (at avg 49mm scf/d) Is there an anticipated gas price increase in the pipeline (so to speak)? Even from these lower numbers moving revenue from $11m to $13m to $20m is still pretty good, and the guidance figures for 2018 do feel conservative, considering the future plans re: turbines and customers, but normally good practice to "under promise and over deliver" than vice - versa. Could be that next news will be the appointment of new CEO, who then would be in position to oversee the farm out process for Tembo, IMO, rather than walk into a fait accompli.
Ledzep, WRL has currently 3 sources of income: 1) gas sales to TPDC (the largest part, as you calculated) 2) gas sales to Tanesco (higher price, but small amount) 3) as long as the TPDC recoverables remain, almost all of TPDC�s stake in Mnazy Bay (20%) for the gas sales (back to TPDC). This is a significant source of income for the whole of 2018. I think total income will be more than 2.5 mln / month at 75 MMscf/d total production. Good luck
Back at my computer now, so I can provide some numbers (all my personal estimates!) At 75 MMscf/d, I expect total gas sales of $5.1 mln per quarter and 4.4 mln per quarter for TPDC receivables, so nearly 3.2 mln income per month. Obviously the income from TPDC receivables will disappear once the outstanding amount has been paid (I expect that to happen in 2019). Note that monthly expenditure (G&A, P&O, interest, capex) is currently around US$ 1 mln (slowly dropping)
One should have in mind that payment of the receivable is not recognized as revenue in the PL statement, but included in the cash flow as the receivable is settled for cash. Beside the receivable on TPDC amounting 20.6 MUSD as of the end of Q3 17, WRL has another receivable of 6,5 MUSD on the Government. However, the settlement of this receiveble has not yet started and it is still unclear how and when it will be settled. Book value of these receivables are slightly lower as they have been discounted due to their long-term nature. WRL says in the Q3 report "Based on the Company�s internal estimates of potential gas sales volumes, the $20.59 million receivable as at September 30, 2017 is expected to be fully recovered by Q4 2018." This would amount to about 4.1 MUSD/quarter on average. However, gas sales are expected to grow in 2018, so payments would be higher in 2018, compared to Q4 17. So Mick 2020's estimate of 4.4 MUSD per quarter in 2018, sounds about right to me as well.
Thanks guys for the additional info and detail. Can't understand why there is not more awareness of WRL, particularly with the write ups by Malcy. Hey-ho, greater opportunity to tuck a few away in the SIPP. Cheers
Perhaps there is an outside chance that the Tanzanian government will pay (part of) the 6.5 mln that it owes to WRL this year as well.... https://tarumbeta.blogspot.nl/2018/01/tanzania-government-to-pay-internal.html