Kuwait Energy
EL-12-211107
12
Net Present Value Summary
Reference Post-Tax NPVs have been attributed to the Proved, the Proved plus Probable
and the Proved plus Probable plus Possible Reserves cases, at a discount rate of 10%
(Table 0.7). Discounting has been done on a mid-year basis to 31
st
May, 2014. NPV
estimates have also been made for the KSF Service Agreement for each oil production
case (Table 0.8).
These assessments have been based upon GCA’s understanding of the fiscal and
contractual terms governing the assets. All NPVs quoted are those exclusively
attributable to KE’s net economic entitlement in the properties under review.
GCA’s Brent Crude oil price scenario for 2Q14, shown in Table 0.6, has been employed
as the reference oil price. These prices were adjusted for location and quality for each
field in KE’s portfolio, based on historic sales prices and contractual terms advised by KE.
TABLE 0.6
BRENT CRUDE OIL PRICE SCENARIO
Year
Price
(US$/Bbl)
2014 (Remainder)
106.55
2015
102.38
2016
98.24
2017
95.48
2018
96.45
2019
99.37
2020+
+2% p.a.
Estimates of future capital and operating expenditures on a 2014 cost basis have been
provided by KE in the form of budgets, development plans, historical costs and forecasts.
GCA has audited these estimates and found them to be reasonable. For economic
modelling purposes costs have been assumed to escalate at 2% p.a. from 2015 onwards
(except that for Area A in Egypt, the GPC Facility Tariff and the Baseline Production
OPEX Reimbursement are held constant, and for Abu Sennan, the handling and
processing fees for production above 2,000 bopd are escalated at 10% p.a. from 2015
onwards, based on the contract with GPC).
