So according to my calculations (which are conservative).
For every 1000bbl/day of production we get out of CPO4 we should expect roughly $20MM to drop to the bottom line of HUSA.
1. I assume a 24% decline from IP to Month 12. 2. I assume $60/bbl. The API on these bbls should be high and that is the net to HUSA after HUSA expenses. 3. This is only a 12 month projection on Cash. The wells are worth more and will produce for a long time. But for simplicity and conservative estimates I'm only using 12 months. 4. Assuming a PE multiple of 7, every 1000 bbls/day of production results in $145MM of increased capitalization.
Someone stated last week that HUSA's interest in CPO-4 was at 25%. However, I looked at HUSA's Sept 2012 Presentation and found that HUSA's interest in CPO-4 is actually at 37.5%. Is there something I don't know?