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Petrolera Zuata, Petrozuata C.A.

: Analysis of Sponsor Returns and Debt Coverage Ratios
Assumptions

(Change these six RED variables)
Initial Oil Price in 1996
Annual Change in Oil Price (1996-2012)
Royalty Rate (2001-2008)
Royalty Rate (2009-2034)
Total Debt Financing
Leverage: Debt/Total Project Cost
Project's Total Cost
Tax Rate

$12.25
2.5%
1.0%
16.7%
$1,450,000
60%
$2,416,667
34%

Asset Beta
Risk-free Rate (Yield on the 30-year Treasury Bond as of January 1997)
Market Risk Premium
Country Risk Premium

Year

1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034

Forecasted
Maya
Price

$12.25
$12.56
$12.87
$13.19
$13.52
$13.86
$14.21
$14.56
$14.93
$15.30
$15.68
$16.07
$16.47
$16.89
$17.31
$17.74
$18.19
$18.64
$18.64
$18.64
$18.64
$18.64
$18.64
$18.64
$18.64
$18.64
$18.64
$18.64
$18.64
$18.64
$18.64
$18.64
$18.64
$18.64
$18.64
$18.64
$18.64
$18.64
$18.64

Change
in Maya
Price

2.5%
2.5%
2.5%
2.5%
2.5%
2.5%
2.5%
2.5%
2.5%
2.5%
2.5%
2.5%
2.5%
2.5%
2.5%
2.5%
2.5%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%

Total
Revenue

$0
$0
$78,524
$429,059
$803,290
$560,499
$580,141
$594,310
$608,833
$623,720
$638,978
$654,618
$670,649
$687,081
$703,924
$721,187
$738,882
$757,020
$758,224
$759,457
$760,722
$762,018
$763,347
$764,708
$766,104
$767,535
$769,001
$770,504
$772,045
$773,624
$775,243
$776,902
$778,603
$780,346
$782,133
$783,964
$785,842
$787,766
$789,738

Cash
Available
for Debt
Service
(CADS)

($80,007)
($610,492)
($820,154)
($139,352)
$243,952
$383,869
$374,482
$351,470
$383,135
$379,409
$415,819
$416,376
$417,733
$364,040
$353,700
$359,505
$367,531
$309,595
$341,704
$373,643
$365,851
$366,964
$312,682
$293,660
$264,839
$281,934
$276,305
$278,150
$273,514
$274,138
$263,068
$262,329
$260,484
$250,113
$234,648
$238,181
$231,118
$229,576
$215,770

Total
Debt
Outstanding

$0
$1,000,000
$1,024,299
$1,242,981
$1,450,000
$1,411,120
$1,372,240
$1,333,360
$1,268,892
$1,205,447
$1,103,295
$992,187
$864,195
$768,166
$680,692
$576,861
$456,838
$408,576
$354,212
$256,355
$136,753
$75,000
$75,000
$75,000
$75,000
$75,000
$0

0.60
6.81%
7.50%
0.00%

Total
Debt
Service

Equity
Cash
Flows

$0
$935,950
($63,079)
$113,580
$85,113
($157,629)
($154,472)
($151,315)
($171,563)
($165,270)
($195,423)
($195,059)
($201,103)
($161,187)
($145,382)
($153,095)
($159,037)
($83,154)
($84,614)
($119,749)
($131,281)
($68,159)
($6,405)
($6,405)
($6,405)
($6,405)
($75,000)
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0

($79,035)
($1,986)
($550,148)
$1,576
$185,047
$227,819
$221,589
$190,031
$214,719
$199,063
$220,578
$218,294
$236,588
$210,755
$204,461
$203,439
$246,435
$225,711
$239,522
$248,128
$266,131
$329,682
$306,277
$287,255
$258,434
$241,232
$201,306
$278,150
$273,514
$274,138
$263,068
$262,329
$260,484
$250,113
$234,648
$238,181
$231,118
$229,576
$215,770

Debt
Service
Coverage
Ratio

2.44
2.42
2.32
2.23
2.30
2.13
2.13
2.08
2.26
2.43
2.35
2.31
3.72
4.04
3.12
2.79
5.38
48.82
45.85
41.35
44.02
3.68

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.

Model Output
Minimum Debt Service Coverage Ratio (DSCR)
Year of Minimum DSCR
Average DSCR
Internal Rate of Return
Net Present Value

2.08
2008
10.46
25.1%
$267,607

1% .25 2. DSCR 2.0% 49.69 1.80 1.0% 22.1% 28.2% 32.73 2.1% 40% 45% 50% 55% 60% 65% 70% 75% 80% 18.8% 25.08 1.08 3.IRR and Minimum DSCR Output Table Leverage IRR 25.0% 25.0% Min.93 1.5% 39.0% 25.3% 24.9% 25.59 IRR as a Function of the Number of Years of Cash Flow Number of Years With Cash Flow IRR 5 10 15 20 25 30 34 15.7% 24.9% 22.5% 21.05 2.4% 19.47 2.

119 0.423) ($195.720 $638.5% 2.347 $764.60 0.1% 30.357 Assumptions Initial Oil Price in 1996 Annual Change in Oil Price (1996-2012) Royalty Rate (2001-2008) Royalty Rate (2009-2034) Total Debt Financing Leverage: Debt/Total Project Cost Project's Total Cost Tax Rate Asset Beta Risk-free Rate (Yield on the 30-year Treasury Bond as of January 1997) Market Risk Premium Country Risk Premium $12.647) $746 $74.687 $2.1% 25.049 0.009 0.031 $214.A.270) ($195.0% 50.570 $16.08 IRR as a Function of the Number of Years of Cash Flow Number of Years With Cash Flow IRR 5 10 15 20 25 30 34 15.64 $18.02 3.80% 13.0% 0.212 $256.60 0.000 0.7% 24.861 $456.872 $28.839 $281.Petrolera Zuata.000) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 ($79.63% 11.000 60% $2.020 $758.1% 27.719 $199.31% 11.704 $373.000 $1.040 $353.10 1.603 $780.138 $263.31% 11.0% 0.08 2.63% 11.31% 11.93 0.79 5.492 $3.60 0.31 3.2% 48.981 $1. Petrozuata C.978 $654.822 $47.902 $778.47 $16.5% 2.308) ($306.310 $608.667 34% 0% 0.643 $365.062 0.64 $18.9% 25.766 $789.5% 32.588 $210.08% 15.64 0.461 $203.315) ($171.41% 17.346 $782.589 $190.64 $18.4% 35.576 $185.81% 7.023 0.484 $250.020 0.484 $45.5% 2.60 0.521 $3.524 $429.032 0.52 $13.708 $766.0% 0.63% 11.31% 11.133 $783.08 2.682 $293.842 $787.755 $204.5% 1.52% 16.470 $383.224 $759.5% 2.403 0.46 1.5% 2.950 ($63.1% 25.4% 29.64 $18.113 $234.31% 11.64 $18.86 $14.64 $18.505 $367.5% 2.08 2.60 0.19 $18.595 $341.56 $12.29 1.079) $113.08 2.070 0.0% 25.23 2.6% 59.31% 11.299 $1.118 $229.749) ($131.5% 2.13 2.166 $680.924 $721.131 $329.000 $0 Total Debt Service Equity Cash Flows $0 $935.2% 49.411.1% 25.5% 2.42 2.753 $75.63% 14.450.343 0.362 $14.141 $594.0% 0.41 1.60 6.99 0.700 $359.08 2008 10.576 $215.024.962 $10.60 11.60 0.007 0.511 $78.1% 63.629) ($154.1% .31% 51.006 ($79.0% 0.04 3.30 2.195 $768.64 $18.0% Total Revenue $0 $0 $78.232 $201.000 $75.08 2.56 $14.025 0.882 $757.898 $3.329 $260.964 $785.065 $1.181 $231.000.13 2.0% 0.19 $13.32 2.281) ($68.068 $262.79% 16.60 0.770 Cash Return on Investment 68.64 Change in Maya Price 2.44 2.304 $6.42% 11.939 $36.787 $9.82 45.648 $238.711 $239.010 0.305 $278.059) ($201.5% 2.306 $278.001 $770.5% 2.037) ($83.0% 0.434 $241.187 $11.30 $15.12 2.329 $260.080 0.18% 17.649 $687.24% 17.624 $775.84% 12.068 $262.738 Cash Available for Debt Service (CADS) ($80.60 0.9% 33.290 $560.733 $364.659 0.86 0.576 $354.1% 48.68 $16.72 4.7% 40.372.514 $274.46 25.934 $276.551 $34.011 0.104 0.294 $236.535 $769.986) ($550.3% 24.21 $14.416.851 $366.447 $1.722 $762.833 $623.3% 53.137 0.0% 0.355 $136.472) ($151.214 0.68 Equity/Total Capital at BOOK VALUES Equity Beta Cost of Equity Discount Factor PV ECF 100% 10% 40% 41% 42% 42% 43% 44% 45% 46% 49% 51% 55% 58% 60% 64% 70% 72% 75% 80% 88% 93% 93% 93% 93% 93% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 0.607 IRR and Minimum DSCR Output Table Leverage 40% 45% 50% 55% 60% 65% 70% 75% 80% IRR 25.035 0.018 $763.081 $703.64 $18.0% 0.333.091 0.08 2.892 $1.683 $5.135 $379.514 $274.75 0.187) ($145.409 $415.243 $776.405) ($6.85 41.64 $18.021 $4.00% Model Output Minimum Debt Service Coverage Ratio (DSCR) Year of Minimum DSCR Average DSCR Internal Rate of Return Net Present Value 2.035) ($1.3% Debt Service Coverage Ratio 2.31% 11.1% 25.17 1.0% 0.103) ($161.250 0.2% 41.60 0.08 2.60 6.1% 35.059 $803.08 2.000 $75.184 0.9% 36.38 48.5% 0.293 0.0% 0.5% 2.277 $287.580 $85.4% 33.5% 2.159) ($6.60 0.522 $248.482 $351.382) ($153.5% 2.43 2.87 $13.187 $864.: Analysis of Sponsor Returns and Debt Coverage Ratios Year 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Forecasted Maya Price $12.25% 13.104 $767.376 $417.64 0.25 $12.1% 25.107 $4.31% 11.118 $229.63% 11.095) ($159.07% 16.4% 34.6% 36.81% 18.08% 12.563) ($165.90% 11.64 $18.499 $580.018 0.013 0.0% 0.181 $231.028 0.113 ($157.64 $18.1% $267.268.692 $576.007) ($610.31% 11.52 1.138 $263.055 0.4% 29.89 $17.952 $383.93 $15.008 0.607 $1.1% Min.04 0.63% 11.236 $17.39 1.964 $312.6% 62.115 $2.504 $772.50% 0.0% 0.74% 17.578 $218.405) ($6.00 1.31% 1.0% 0.150 $273.64 0.7% $1.1% 25.9% 22.68 0.64 0.33 1.64 $18.614) ($119.64 $18.016 0.819 $416.148) $1.838 $408.74 $18.000 $75.000 $1.26 2.450.0% 0.352) $243.770 Total Debt Outstanding $0 $1.64 $18.035) ($1.405) ($75.681 $12.8% 33.205.31% 11.57% 17.439 $246.142 $21.682 $306.37 1.618 $670.31% 11.31 $17.044 0.240 $1.64 $18.1% 25.435 $225.063 $13.113 $234.492) ($820.60% 15.015 0.576 $215.60 0.7% 35.64 $18.265 $2.5% 64.154) ($84.5% 2.80 0.08 2.5% 2.0% 38.31% 11.64 $18.360 $1.063 $220.84 0.120 $1.242.103.0% 0.457 $760.60 0.800 $1.869 $374.35 2.484 $250.25 2.64 $18.64 $18.35 44.1% 25.64 $18.9% 60.063 $7.158 0.047 $227.9% 45.154) ($139.0% 0.1% 62.0% 0.579 $5.5% 2.64 $18.0% 0.28% 13.04% 14.557 0.0% 0.295 $992.08 2.07 $16.405) ($6.473 0.8% 65.819 $221.045 $773.531 $309.870 $18.150 $273.660 $264.225 $12.0% 25.64 0.1% 25.187 $738.24 1.44 1. DSCR 2.0% 16.0% 30.128 $266.1% 49.892 $29.255 $258.012 0.133 $64.648 $238.039 0.000 $75.8% 49.