Sasol Form 20-F for the year ended 30 June 2021 - Book - Page 125
TABLE 6—CHANGES IN THE STANDARDISED MEASURE OF DISCOUNTED NET CASH FLOWS
Synthetic oil—South Africa
(Rand in millions)
2021
2020
2019
Present value—opening balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net changes for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sales and transfers of oil and gas produced net of production costs . . . . . . . . . .
Development costs incurred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net change due to current reserves estimates from:
Improved recovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commercial arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Revisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Extensions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net changes in prices and costs related to future production . . . . . . . . . . . . . . . .
Changes in estimated future development costs . . . . . . . . . . . . . . . . . . . . . . . . . .
Accretion of discount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net change in income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net change due to exchange rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Present value at 30 June . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1 472,1)
17 470,4
(13 666,7)
5 848,1
85 306,3
(86 778,4)
(15 543,7)
8 005,5
50 587,1
34 719,2
(25 075,3)
11 238,6
—
—
2 096,8
—
(5 925,9)
34 264,9
(433,2)
(5 560,8)
847,2
15 998,3
—
—
228,6
736,1
(162 940,7)
(3 433,3)
7 745,8
39 488,5
38 934,8
(1 472,1)
—
—
112,1
2 493,1
24 614,8
(16 204,1)
4 670,8
(11 950,9)
44 820,1
85 306,3
Excluded from the future earnings, capital expenditure and carrying values are the impacts of the sale of the 16
air separation units located in Secunda. Finalisation of the transaction with Air Liquide was concluded in June 2021
following the approval from the South African competition authorities.
Further significant changes since the prior year relates to the reduction in future development costs. In 2021, we
optimised on the shutdown in Secunda Operations which resulted in a significant reduction in capital expenditure.
Standardised measure of discounted future net cash flows
The standardised measure of discounted future net cash flows, relating to the proved reserves in the table above,
are calculated in accordance with the requirements of FASB ASC Section 932-235. Future cash inflows are computed by
applying the prices used in estimating proved reserves to the year-end quantities of those reserves. Future development
and production costs are computed by applying the costs used in estimating proved reserves. Future income taxes are
computed by applying the appropriate year-end statutory tax rates, with consideration of future tax rates already
legislated, to the future pre-tax net cash flows relating to the reserves, less the tax basis of the properties involved. The
future income tax expenses therefore give effect to the tax deductions, tax credits and allowances relating to the reserves.
Discounted future net cash flows are the result of subtracting future development and production costs and
future income taxes from the cash inflows. A discount rate of 10 percent a year is applied to reflect the timing of the
future net cash flows relating to the reserves. The information provided here does not represent management’s estimate
of the expected future cash flows or value of the properties. Estimates of reserves are imprecise and will change over
time as new information becomes available. Moreover, probable and possible reserves along with other classes of
resources, which may become proved reserves in the future, are excluded from the calculations. The valuation prescribed
under FASB ASC Section 932 requires assumptions as to the timing and amount of future development and production
costs. The calculations are made as of 30 June each year and should not be relied upon as an indication of the
companies’ future cash flows or value of synthetic oil reserves.
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