Pre-Test Project Economics

Which project do you choose to invest: (the same total Capex and Opex)

• NPV5: $100mn with  IRR of 7%

• NPV10:  $50mn with  IRR of 12%

• NPV15:  $0mn with  IRR of 15%

• I have no idea, can you please explain?

Net Present Value (NPV) at discount rate of 0% = Net Cash Flow (NCF)

• True

• False

• I do not want to guess, please explain.

Which of the following Cash Flow has the highest NPV10?

• Year 1 (25)

  Year 2 (5)

  Year 3 (0)

  Total (30)

• Year 1 (0)

  Year 2 (5)

  Year 3 (26)

  Total (31)

• Year 1 (10)

  Year 2 (15)

  Year 3 (5)

  Total (30)

• Not sure, please explain

If there is a project where the contractor's cash flow is always positive, what is the impact on IRR:

• IRR is positive

• IRR is negative

• IRR cannot be calculated

• IRR is 0%

Block MLC PSC Cost Recovery has gross revenue of $100mn and costs of $50mn, its net (entitlement) revenue and net costs based on 40% Working Interest are:

• Revenue = $40mn and Costs = $20mn

• Revenue < $40mn and Costs = $20mn

• Revenue = $40mn and Costs <$20mn

• Not sure, please explain

Assuming an 85/15 split after tax (Govt/Contr) and Equity to be split is $500mn, additional $20mn cost recoverable as a result of higher Opex will lower Contractor NCF by:

• $3mn

• $17mn

• $20mn

• Not sure, please explain

Under the Indonesia PSC fiscal regime, higher oil price impact to net production entitlement for Contractor is:

• Higher

• Lower

• No impact

• Not sure, please explain

Impact to Contractor NCF on $100mn Cost reimbursement and $100mn Cost Recovery are the same. Assuming ETBS > $100mn.

• True

• False

• Not sure, please explain

Government Take in percentage (e.g. 15%) is actually the rate of return for the Government.

• True

• False

• No idea, please enlighten

If discount rate is 10%, which project will give the highest IRR?

• Project A

• Project B

• Project C

• Project A, B, & C have the same IRR