Project Economics, Payback, and Capital Efficiency
A consolidated view of project-scale economics for the two-well South Texas natural gas reactivation program, including revenue, profit, and investor participation across the modeled seven-year period.
The base case models 17,748,720 Mcf of gas produced over seven years, generating $45,791,698 in revenue, $25,047,172 in gross profit, and $19,090,087 to investors holding up to 70% Working Interest, with targeted payback in under two years in the base price deck.
High-Level Economics Summary
The program is engineered for capital efficiency, targeting early cash flow from Mobil Fee 6 and durable, lower-decline volumes from Mobil Fee 4. The economics are driven by field-proven reservoirs, existing infrastructure, and a defined, engineering-led work scope, rather than frontier exploration risk.
The figures above are derived from the detailed model referenced on the Model & Sensitivities page and summarized further on the Investment Terms page. All values are illustrative and subject to change.
Price Deck and Sensitivity Framework
The base case economics assume a long-term natural gas price of $2.58/Mcf applied to modeled production of 17,748,720 Mcf over seven years. The model is stress-tested against downside and upside price decks to understand resilience under varying commodity price conditions.
- Base Case: Supports full capital recovery and targeted investor returns within the modeled seven-year period.
- Downside Case: Lower price environment and/or deferred volumes to evaluate breakeven resilience and coverage of capital.
- Upside Case: Higher price scenarios and favorable operational outcomes to quantify incremental value and optionality.
Detailed price paths, scenario definitions, and sensitivity tables are maintained in the model and available via the Model & Sensitivities page and the Document Library / Data Room.
Illustrative Price Deck and Sensitivity Snapshot
| Scenario | Price Deck ($/Mcf) |
Relative Cash Flow vs. Base |
Indicative Payback Timing |
|---|---|---|---|
| Downside | $2.00 | ~70–80% of base | Extended vs. base |
| Base Case | $2.58 | 100% (reference) | Target < 2 years |
| Upside | $3.25 | 120–130% of base | Accelerated vs. base |
The values above are illustrative and for framework purposes only. Final price decks, scenario definitions, and quantitative outputs are maintained in the detailed economic model and supporting schedules.
Cash Flow Profile and Payback Dynamics
Ramp-Up and Stabilization
- Early-year cash flows are driven by reactivation of Mobil Fee 6, leveraging existing infrastructure and targeting shallow gas volumes.
- Mobil Fee 4 contributes larger and longer-lived volumes, supporting sustained cash generation through the remainder of the seven-year modeled period.
- The profile is designed to accelerate capital recovery while maintaining long-term production and cash flow visibility.
Monthly and annual cash flow schedules, including capex phasing and operating cost profiles, are available in the full economic model.
Payback and Investor Distributions
- The structure targets investor capital payback in under two years in the base case, with 100% of net profit flowing to investors until the full $8,000,000 is recovered.
- After capital recovery, ongoing net profits are shared 70% to investors / 30% to operator for the life of the wells.
- Distributions are expected to be periodic (e.g., monthly or quarterly), subject to operational performance, reserves behavior, and market conditions.
The waterfall mechanics are summarized on the Investment Terms page and detailed in the definitive subscription and joint operating agreement documentation.
Scenario Comparison Summary
The project has been evaluated under multiple scenarios to frame risk and return across a realistic range of outcomes. While actual results will vary, the scenario framework is designed to help investors understand key sensitivities and breakpoints.
Downside Case
- Lower price environment and/or delayed volumes.
- Stress test of capital recovery timing and coverage.
- Focus on balance sheet resilience and cost discipline.
Used to test robustness of the payback profile and to evaluate worst-case downside protection assumptions.
Base Case
- Anchored on $2.58/Mcf and engineered production profile.
- Drives headline revenue, profit, and payback metrics.
- Incorporates calibrated operating costs and downtime assumptions.
Forms the core reference case for framing investment decision-making, supported by third-party engineering inputs.
Upside Case
- Higher price scenarios and/or better-than-modeled well performance.
- Potential acceleration of payback and incremental value uplift.
- Optionality for future recompletions or additional reservoir access.
Helps quantify the value of technical and market upside while preserving a disciplined base case view.
Scenario definitions and quantitative outputs are documented in the supporting model and outlined on the Model & Sensitivities and Risk Factors pages.
Risk, Tax, and Regulatory Context
Risk Alignment with Economics
- Economics are inherently sensitive to commodity prices, mechanical outcomes, and reservoir performance.
- Operational, regulatory, and counterparty risks can influence timing and magnitude of cash flows.
- Risk factors are mapped directly against economic drivers (volume, price, cost, timing) to maintain transparency.
A structured risk register and qualitative discussion are set out on the Risk Factors and Compliance pages and in the full offering memorandum.
Tax and After-Tax Economics
- After-tax outcomes depend on investor-specific tax profiles, including eligibility for depletion, depreciation, and treatment of intangible costs.
- Timing of deductions and recognition of income can influence realized IRR versus pre-tax cash-on-cash metrics.
- Non-U.S., tax-exempt, and institutional investors may have specialized considerations that shape their after-tax return profile.
A high-level overview is provided on the Tax Considerations page; investors must rely on their own advisors for after-tax modeling.
Important Notice and Forward-Looking Information
All economic information presented on this page and throughout the website is illustrative, based on assumptions that may not be realized, and constitutes forward-looking information. Actual results may differ materially due to commodity price volatility, operational performance, regulatory developments, and other factors described in the full risk disclosures.
Nothing on this page or website should be relied upon as a guarantee of performance or a precise forecast of returns. Any decision to invest must be made solely on the basis of the definitive offering documents, including the full risk, tax, and legal disclosures and the detailed economic model available under appropriate confidentiality arrangements.
Safari Production Company, Inc. does not provide investment, tax, legal, or accounting advice. Each prospective investor is responsible for its own due diligence and professional advice.
Next Steps for Interested Investors
- Review the Investment Terms.
- Examine the detailed Model & Sensitivities.
- Coordinate with advisors on Tax Considerations and Risk Factors.