Mr Vaux gets paid to be optimistic. Here are the numbers:
40,000,000 cubes a day at $2.20 per thousand cubes is $88,000 a day. [ 40,000,000 / 1000 * $2.20 ]
365 days a year [ highly optimistic - wells need servicing ] times $88,000 a day is $32,120,000 a year.
Now take out the mineral owner's interest. In Texas this would be 1/8 right off the top. Maybe in ".. that part of the country" it's less. $32,120,000 * .875 = $28,105,000.
Now for their piece: $28,105,000 * .015 [ 1.5% ] = $421,575 a year
Then there are all those delightful little things like severance taxes, well servicing costs [ if their interest puts them on the hook for the same 1.5% of those costs as their interest ] and everything else that nickels-and-dimes you to death in the oil biz.
This is what I alluded to in my prior post about "... telling it straight, and like it is". Given Mr. Vaux's previous gaffes in relating the Company's story and its relationship with its partners, his departure will be another sign the Company wants to be a serious player, and will cause me to consider a possible investment. |
