Frequently Asked Questions
(Updated May 2010)
Q: What is Winstar's production?
A: Winstar produced an average of 1,505 barrels of oil equivalent per day in the first quarter of 2010, weighted 86.4% to oil and liquids and 13.3% to natural gas, all of which was produced in Tunisia.
Q: What is Winstar's cash flow?
A: The Company generated funds from continuing operations for the three months ended March 31, 2010, of $5.8 million.
Q: What is Winstar's debt?
A: As of March 31, 2010, Winstar had working capital of $5.9 million, which included no bank debt.
Q: How extensive is Winstar’s undeveloped land position?
A: Winstar has three to four years of exploration inventory, including 143,081 net acres in Tunisia and 567,880 gross and net acres in Hungary, for a total of 710,961 net acres. In April 2008, Winstar finalized a major joint venture agreement with the Rompetrol Group of Romania. As part of the agreement, Winstar has agreed to fulfill certain commitments to earn a 60% interest in the onshore Satu Mare concession in northwestern Romania. The Satu Mare concession shares a border with Hungary and is situated within the Pannonian basin, thereby possessing similar geological and geophysical characteristics as Winstar's Igal and Torokoppany properties in Hungary. The Satu Mare concession consists of 728,710 acres. Rompetrol holds the right to explore for and produce hydrocarbons from the Satu Mare concession through September 2033.
Q: Why should someone consider investing in Winstar?
A: Winstar offers proven drilling success in Tunisia along with high impact development and exploration opportunities in southern Tunisia, as well as high-impact exploration upside in Hungary and Romania. The Company has an experienced management team and board of directors, and significant built-in opportunities.
Q: What is Winstar’s net asset value per share?
A: Winstar estimates its before tax net asset value per share at $11.75, and $7.02 for its after tax net asset value per share, based on December 2009 oil and natural gas reserves and financials. The reserves have been calculated before tax, using an escalated price deck at present value discounted 10%, based on an independent appraisal for total proved and probable reserves and no land value attributed to the Company’s vast acreage in Tunisia, Hungary and Romania.
Q: Who are Winstar’s reserves engineers?
A: Winstar’s reserves are independently evaluated by RPS Energy of Calgary for Tunisia and Hungary.
Q: How many shares does Winstar have outstanding?
A: As of March 31, 2010, Winstar had 34.3 million common shares outstanding.
Q: What is Winstar’s taxation rate in the countries in which it operates?
A:In Tunisia, one concession became taxable in 2008. Depending on the concession, taxation rates range from 35% to 75% based on R-factors. Income taxation is done at the concession level and Winstar pays no corporate income tax. Royalties in Tunisia range from 2% to 15%.
In Hungary, Winstar is paying a 13% royalty. Corporate income tax rates are 4%, but Winstar is not currently taxable.
In Romania, corporate tax rates are 16%, and an oil and gas royalty of 3.5% to 13.5%. This royalty rate is volume related (must be producing more than 8,000 bopd to pay maximum 13.5%).