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Petrozuata Financial Model

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Petrozuata Financial Model
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  Assumptions   (Change these six RED variables) Initial Oil Price in 1996$12.25Annual Change in Oil Price (1996-2012)2.5%Royalty Rate (2001-2008)1.0% Royalty Rate (2009-2034) 16.7%Total Debt Financing $1,450,000 Leverage: Debt/Total Project Cost60% Project's Total Cost $2,416,667Tax Rate 34% Asset Beta 0.60Risk-free Rate (Yield on the 30-year Treasury Bond as of January 1997) 6.81% Market Risk Premium7.50%Country Risk Premium0.00% CashAvailableDebtForecastedChangefor DebtTotalTotalEquityServiceMaya in MayaTotalServiceDebtDebtCashCoverage YearPrice PriceRevenue(CADS)OutstandingServiceFlowsRatio 1996 $12.25 2.5% $0 ($80,007) $0 $0 ($79,035) 1997 $12.56 2.5% $0 ($610,492) $1,000,000 $935,950 ($1,986) 1998 $12.87 2.5% $78,524 ($820,154) $1,024,299 ($63,079) ($550,148) 1999 $13.19 2.5% $429,059 ($139,352) $1,242,981 $113,580 $1,576 2000 $13.52 2.5% $803,290 $243,952 $1,450,000 $85,113 $185,047 2001 $13.86 2.5% $560,499 $383,869 $1,411,120 ($157,629) $227,819  2.442002 $14.21 2.5% $580,141 $374,482 $1,372,240 ($154,472) $221,589  2.422003 $14.56 2.5% $594,310 $351,470 $1,333,360 ($151,315) $190,031  2.322004 $14.93 2.5% $608,833 $383,135 $1,268,892 ($171,563) $214,719  2.232005 $15.30 2.5% $623,720 $379,409 $1,205,447 ($165,270) $199,063  2.302006 $15.68 2.5% $638,978 $415,819 $1,103,295 ($195,423) $220,578  2.132007 $16.07 2.5% $654,618 $416,376 $992,187 ($195,059) $218,294  2.132008 $16.47 2.5% $670,649 $417,733 $864,195 ($201,103) $236,588  2.082009 $16.89 2.5% $687,081 $364,040 $768,166 ($161,187) $210,755  2.262010 $17.31 2.5% $703,924 $353,700 $680,692 ($145,382) $204,461  2.432011 $17.74 2.5% $721,187 $359,505 $576,861 ($153,095) $203,439  2.352012 $18.19 2.5% $738,882 $367,531 $456,838 ($159,037) $246,435  2.312013 $18.64 0.0% $757,020 $309,595 $408,576 ($83,154) $225,711  3.722014 $18.64 0.0% $758,224 $341,704 $354,212 ($84,614) $239,522  4.042015 $18.64 0.0% $759,457 $373,643 $256,355 ($119,749) $248,128  3.122016 $18.64 0.0% $760,722 $365,851 $136,753 ($131,281) $266,131  2.792017 $18.64 0.0% $762,018 $366,964 $75,000 ($68,159) $329,682  5.382018 $18.64 0.0% $763,347 $312,682 $75,000 ($6,405) $306,277  48.822019 $18.64 0.0% $764,708 $293,660 $75,000 ($6,405) $287,255  45.852020 $18.64 0.0% $766,104 $264,839 $75,000 ($6,405) $258,434  41.352021 $18.64 0.0% $767,535 $281,934 $75,000 ($6,405) $241,232  44.022022 $18.64 0.0% $769,001 $276,305 $0 ($75,000) $201,306  3.682023 $18.64 0.0% $770,504 $278,150 $0 $278,150 2024 $18.64 0.0% $772,045 $273,514 $0 $273,514 2025 $18.64 0.0% $773,624 $274,138 $0 $274,138 2026 $18.64 0.0% $775,243 $263,068 $0 $263,068 2027 $18.64 0.0% $776,902 $262,329 $0 $262,329 2028 $18.64 0.0% $778,603 $260,484 $0 $260,484 2029 $18.64 0.0% $780,346 $250,113 $0 $250,113 2030 $18.64 0.0% $782,133 $234,648 $0 $234,648 2031 $18.64 0.0% $783,964 $238,181 $0 $238,181 2032 $18.64 0.0% $785,842 $231,118 $0 $231,118 2033 $18.64 0.0% $787,766 $229,576 $0 $229,576 2034 $18.64 0.0% $789,738 $215,770 $0 $215,770 Note: This simplified version of the Petrozuata project's economics is designed to accompany Petrolera Zuata, Petrozuata C.A. , HBS No. 299-012. Although the have been made to model is based on the actual model used, a number of changes have been made to facilitate the analysis. Minimum Debt Service Coverage Ratio (DSCR)2.08 Year of Minimum DSCR2008  Average DSCR 10.46 Internal Rate of Return25.1%Net Present Value$267,607 Petrolera Zuata, Petrozuata C.A.: Analysis of Sponsor Returns and Debt Coverage Ratios Model Output  LeverageIRRMin. DSCRNumber of Years 25.1% 2.08 With Cash FlowIRR 40% 18.4% 3.0545% 19.5% 2.73 5 15.9%50% 21.0% 2.47 10 22.7%55% 22.8% 2.25 15 24.3% 60%25.1%2.08  20 24.9%65% 28.2% 1.93 25 25.0%70% 32.5% 1.80 30 25.0%75% 39.0% 1.69 34 25.1%80% 49.0% 1.59 IRR and Minimum DSCR Output TableIRR as a Function of the Number  of Years of Cash Flow  Petrolera Zuata, Petrozuata C.A.: Analysis of Sponsor Returns and Debt Coverage Ratios CashAvailableDebtForecastedChangefor DebtTotalTotalEquityCashServiceEquity/TotalMaya in MayaTotalServiceDebtDebtCashReturn onCoverageCapital atEquityCost ofDiscountPV YearPrice PriceRevenue(CADS)OutstandingServiceFlowsInvestmentRatioBOOK VALUESBetaEquityFactorECF 1996 $12.25 2.5% $0 ($80,007) $0 $0 ($79,035) 100% 0.60 11.31% 1.000 ($79,035)1997 $12.56 2.5% $0 ($610,492) $1,000,000 $935,950 ($1,986) 10% 6.00 51.81% 0.659 ($1,308)1998 $12.87 2.5% $78,524 ($820,154) $1,024,299 ($63,079) ($550,148) 40% 1.52 18.18% 0.557 ($306,647)1999 $13.19 2.5% $429,059 ($139,352) $1,242,981 $113,580 $1,576 41% 1.46 17.74% 0.473 $7462000 $13.52 2.5% $803,290 $243,952 $1,450,000 $85,113 $185,047 42% 1.44 17.57% 0.403 $74,5112001 $13.86 2.5% $560,499 $383,869 $1,411,120 ($157,629) $227,819 68.5% 2.44 42% 1.41 17.41% 0.343 $78,1332002 $14.21 2.5% $580,141 $374,482 $1,372,240 ($154,472) $221,589 64.6% 2.42 43% 1.39 17.24% 0.293 $64,8222003 $14.56 2.5% $594,310 $351,470 $1,333,360 ($151,315) $190,031 59.1% 2.32 44% 1.37 17.07% 0.250 $47,4842004 $14.93 2.5% $608,833 $383,135 $1,268,892 ($171,563) $214,719 62.9% 2.23 45% 1.33 16.79% 0.214 $45,9392005 $15.30 2.5% $623,720 $379,409 $1,205,447 ($165,270) $199,063 60.8% 2.30 46% 1.29 16.52% 0.184 $36,5512006 $15.68 2.5% $638,978 $415,819 $1,103,295 ($195,423) $220,578 65.1% 2.13 49% 1.24 16.08% 0.158 $34,8922007 $16.07 2.5% $654,618 $416,376 $992,187 ($195,059) $218,294 63.6% 2.13 51% 1.17 15.60% 0.137 $29,8722008 $16.47 2.5% $670,649 $417,733 $864,195 ($201,103) $236,588 62.3% 2.08 55% 1.10 15.04% 0.119 $28,1422009 $16.89 2.5% $687,081 $364,040 $768,166 ($161,187) $210,755 53.0% 2.26 58% 1.04 14.63% 0.104 $21,8702010 $17.31 2.5% $703,924 $353,700 $680,692 ($145,382) $204,461 50.2% 2.43 60% 0.99 14.25% 0.091 $18,5702011 $17.74 2.5% $721,187 $359,505 $576,861 ($153,095) $203,439 49.8% 2.35 64% 0.93 13.80% 0.080 $16,2362012 $18.19 2.5% $738,882 $367,531 $456,838 ($159,037) $246,435 49.7% 2.31 70% 0.86 13.28% 0.070 $17,3622013 $18.64 0.0% $757,020 $309,595 $408,576 ($83,154) $225,711 40.9% 3.72 72% 0.84 13.08% 0.062 $14,0632014 $18.64 0.0% $758,224 $341,704 $354,212 ($84,614) $239,522 45.1% 4.04 75% 0.80 12.84% 0.055 $13,2252015 $18.64 0.0% $759,457 $373,643 $256,355 ($119,749) $248,128 49.2% 3.12 80% 0.75 12.42% 0.049 $12,1872016 $18.64 0.0% $760,722 $365,851 $136,753 ($131,281) $266,131 48.1% 2.79 88% 0.68 11.90% 0.044 $11,6812017 $18.64 0.0% $762,018 $366,964 $75,000 ($68,159) $329,682 48.2% 5.38 93% 0.64 11.63% 0.039 $12,9622018 $18.64 0.0% $763,347 $312,682 $75,000 ($6,405) $306,277 41.0% 48.82 93% 0.64 11.63% 0.035 $10,7872019 $18.64 0.0% $764,708 $293,660 $75,000 ($6,405) $287,255 38.4% 45.85 93% 0.64 11.63% 0.032 $9,0632020 $18.64 0.0% $766,104 $264,839 $75,000 ($6,405) $258,434 34.6% 41.35 93% 0.64 11.63% 0.028 $7,3042021 $18.64 0.0% $767,535 $281,934 $75,000 ($6,405) $241,232 36.7% 44.02 93% 0.64 11.63% 0.025 $6,1072022 $18.64 0.0% $769,001 $276,305 $0 ($75,000) $201,306 35.9% 3.68 100% 0.60 11.31% 0.023 $4,5792023 $18.64 0.0% $770,504 $278,150 $0 $278,150 36.1% 100% 0.60 11.31% 0.020 $5,6832024 $18.64 0.0% $772,045 $273,514 $0 $273,514 35.4% 100% 0.60 11.31% 0.018 $5,0212025 $18.64 0.0% $773,624 $274,138 $0 $274,138 35.4% 100% 0.60 11.31% 0.016 $4,5212026 $18.64 0.0% $775,243 $263,068 $0 $263,068 33.9% 100% 0.60 11.31% 0.015 $3,8982027 $18.64 0.0% $776,902 $262,329 $0 $262,329 33.8% 100% 0.60 11.31% 0.013 $3,4922028 $18.64 0.0% $778,603 $260,484 $0 $260,484 33.5% 100% 0.60 11.31% 0.012 $3,1152029 $18.64 0.0% $780,346 $250,113 $0 $250,113 32.1% 100% 0.60 11.31% 0.011 $2,6872030 $18.64 0.0% $782,133 $234,648 $0 $234,648 30.0% 100% 0.60 11.31% 0.010 $2,2652031 $18.64 0.0% $783,964 $238,181 $0 $238,181 30.4% 100% 0.60 11.31% 0.009 $2,0652032 $18.64 0.0% $785,842 $231,118 $0 $231,118 29.4% 100% 0.60 11.31% 0.008 $1,8002033 $18.64 0.0% $787,766 $229,576 $0 $229,576 29.1% 100% 0.60 11.31% 0.007 $1,6072034 $18.64 $789,738 $215,770 $0 $215,770 27.3% 100% 0.60 11.31% 0.006 $1,357 AssumptionsInitial Oil Price in 1996$12.25Annual Change in Oil Price (1996-2012)2.5%Royalty Rate (2001-2008)1.0%LeverageIRRMin. DSCR Royalty Rate (2009-2034) 16.7% 25.1%  2.08 Number of Years Total Debt Financing $1,450,000 40% 25.1% 2.08 With Cash FlowIRRLeverage: Debt/Total Project Cost60%  45% 25.1% 2.08Project's Total Cost $2,416,667 50% 25.1% 2.08 5 15.9% Tax Rate34%  55% 25.1% 2.08 10 22.7%0% 60%25.1%2.08  15 24.3% Asset Beta0.60  65% 25.1% 2.08 20 24.9% Risk-free Rate (Yield on the 30-year Treasury Bond as of January 196.81%  70% 25.1% 2.08 25 25.0% Market Risk Premium7.50%  75% 25.1% 2.08 30 25.0% Country Risk Premium0.00%  80% 25.1% 2.08 34 25.1% Model OutputMinimum Debt Service Coverage Ratio (DSCR)2.08 Year of Minimum DSCR2008  Average DSCR 10.46 Internal Rate of Return25.1%Net Present Value$267,607IRR as a Function of the Number  of Years of Cash FlowIRR and Minimum DSCR Output Table
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