BRU buru energy limited

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Bru Oilers Thread, page-20

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jophda

496 Posts.

39

10/04/18

15:41

Post #: 32351617
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Originally posted by jophda ↑

WHERE CAN YOU MAKE A $20 MILLION DOLLAR IN A LONG LIFE ASSET WHICH CAN PAY FOR ITSELF IN A YEAR ?

CEO I think that your estimate for saving in Transport cost to Broome at 5000 bopd are correct but you have not included higher port costs at Broome of about $4 per bbl and interest costs for a $ 20 million loan of $ 1 per bbl .
However that is all good because you have you have not factored in the increased margin moving from 3000 to 5000 bopd .

To pay for this $ 20 million asset in one year at 5000 bopd would require an increase of margin of $ 11.80 per bbl for a 340 day year .
Ater factoring in the reduced trucking cost of $10 and adding on $4 for port costs and $1 for interest , all per bbl , the result is that an increase in margin of  $ 6.80 per bbl would need to come from the increase in volume from 3000 to 5000 bopd .

As there are a lot of fixed costs that should not change much , if they keep to Eric's mantra of keeping  the operation lean and mean  as the cash flow increased  , it would be easily doable .

Every time I read how the Broome terminal FID has to wait for updated reserves or that we have to find more oil to justify it or we have to build an expensive oil pipeline to the highway with load out first , a LOUD PSYCHIC SREEEEAM goes off in my head .

Imo the FID for a Broome terminal should have come 6 months ago . Not a lot of money goes out to get the permits . The loan only needs to be activated when construction contracts are entered into .

They have talked the talk about being an Oil Producer and the importance of cash flow but I think that the DNA of the business is still about being an Oil and Gas Exploration company .

The investment case is so compelling that if the full resources of the company were put behind doing it , it could have been done before now .The world is awash with  money looking for yield .
Borrow it of the Mafia if you have to .

gltah

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Should have had first line .Where can you make a $20 million dollar investment in a long life asset which can pay for it in a year .

After I had typed the heading I decided to shout it but left out INVESTMENT .
However I think I have shouted myself hoarse .Better shut up before too many put me on ignore .

BRU Price at posting: 31.0¢ Sentiment: Buy Disclosure: Held
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