hiwind

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Sun Feb 3rd 19:16 PM | Rating: 0 0
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The Long Case for China North East Petroleum

Can anyone answer the following issues posted on Yahoo message board on 1-31-2008
----------------------...
no cash left when Q4/07 is out 31-Jan-08 01:51 pm here is the number.

revenue was $8.4mm based on oil price of $90/b
Production costs: $1.0mm (12% same as before)
Depreciation+Amortizat... $2.0mm (23.7%, same as before, and you can add this amount to cash flow from operation)
Government oil surcharge: $1.49mm ($16/b when oil price is $90)
OPERATING EXPENSES: $0.42mm (5%, same as before)
otherEXPENSES $0.09mm
income before tax: $3.4
tax: $1.178mm (34.66%)
Minority interests: $0.267 (12% of after tax incmoe, same as before)
income: $1.96mm EPS: 10 cents
cash flow from operation assuming account receivable and account payable is the same: $1.96+2.0mm =$4.0 mm

Now don't forget the company added 26 new well in Q4/07
It did cost $0.11mm x 26 =$2.86mm cash up-front payment
and those $8.58mm Accounts payable is due in 12 months
so company had to pay around $2.14mm each quarter.
total payment is $5mm
and company could not pay tax on time, old # was $2.228mm, this time, it have to add $1mm more so that cash flow could be $5mm
balance sheet is just like balance "sh*t" since
26 new wells added $0(.31-0.11)x26=$5.2mm to "24 months" and total will be $16.7+5.2=$21.9mm
tax payable will increase to $3.3mm,
cash is amlost "0"
current asset is still $5.9mm
current Current Liabilities is $12mm
total Liabilities is $35mm up from $31mm

bottom line: total Liabilities increases each Q, and no cash left for this company since it started, and may end the same way.
A 25 year old kid can't fix the problem, no even those NY financial guru

Just my 2 cents

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