Standardized measure of discounted future net cash flows
Estimated future cash inflows represent the revenues that would be received from production and are determined by applying the year-end average prices during the years ended. Future price changes are considered only to the extent provided by contractual arrangements. Estimated future development and production costs are determined by estimating the expenditures to be incurred in developing and producing the proved reserves at the end of the year. Neither the effects of price and cost escalations nor expected future changes in technology and operating practices have been considered. The standardized measure is calculated as the excess of future cash inflows from proved reserves less future costs of producing and developing the reserves, future income taxes and a yearly 10% discount factor. Future production costs include the estimated expenditures related to the production of proved reserves plus any production taxes without consideration of future inflation. Future development costs include the estimated costs of drilling development wells and installation of production facilities, plus the net costs associated with dismantlement and abandonment of wells and facilities, under the assumption that year-end costs continue without considering future inflation. Future income taxes were calculated in accordance with the tax laws of the Countries in which Eni operates. The standardized measure of discounted future net cash flows, related to the preceding proved oil and gas reserves, is calculated in accordance with the requirements of FASB Extractive Activities – Oil & Gas (Topic 932). The standardized measure does not purport to reflect realizable values or fair market value of Eni’s proved reserves. An estimate of fair value would also take into account, among other things, hydrocarbon resources other than proved reserves, anticipated changes in future prices and costs and a discount factor representative of the risks inherent in the oil and gas exploration and production activity.
The standardized measure of discounted future net cash flows by geographical area consists of the following:
(€ million) |
Italy |
Rest of Europe |
North Africa |
Sub-Saharan Africa |
Kazakh- |
Rest of Asia |
Americas |
Australia and Oceania |
Total |
December 31, 2011 |
|
|
|
|
|
|
|
|
|
Consolidated subsidiaries |
|
|
|
|
|
|
|
|
|
Future cash inflows |
38,200 |
37,974 |
109,825 |
59,263 |
50,443 |
10,403 |
11,980 |
5,185 |
323,273 |
Future production costs |
(5,740) |
(7,666) |
(17,627) |
(15,191) |
(7,845) |
(3,852) |
(2,687) |
(813) |
(61,421) |
Future development and abandonment costs |
(4,712) |
(7,059) |
(9,639) |
(5,734) |
(3,705) |
(2,842) |
(1,836) |
(224) |
(35,751) |
Future net inflow before income tax |
27,748 |
23,249 |
82,559 |
38,338 |
38,893 |
3,709 |
7,457 |
4,148 |
226,101 |
Future income tax |
(9,000) |
(15,912) |
(46,676) |
(23,075) |
(9,866) |
(1,124) |
(2,474) |
(1,254) |
(109,381) |
Future net cash flows |
18,748 |
7,337 |
35,883 |
15,263 |
29,027 |
2,585 |
4,983 |
2,894 |
116,720 |
10% discount factor |
(9,692) |
(2,572) |
(16,191) |
(4,833) |
(17,599) |
(559) |
(1,914) |
(1,122) |
(54,482) |
Standardized measure of discounted future net cash flows of consolidated subsidiaries at December 31, 2011 |
9,056 |
4,765 |
19,692 |
10,430 |
11,428 |
2,026 |
3,069 |
1,772 |
62,238 |
Equity-accounted entities |
|
|
|
|
|
|
|
|
|
Future cash inflows |
|
21 |
649 |
1,866 |
|
6,141 |
15,067 |
|
23,744 |
Future production costs |
|
(5) |
(259) |
(471) |
|
(1,540) |
(4,598) |
|
(6,873) |
Future development and abandonment costs |
|
(2) |
(36) |
(147) |
|
(1,247) |
(1,754) |
|
(3,186) |
Future net inflow before income tax |
|
14 |
354 |
1,248 |
|
3,354 |
8,715 |
|
13,685 |
Future income tax |
|
(3) |
(3) |
(189) |
|
(824) |
(5,368) |
|
(6,387) |
Future net cash flows |
|
11 |
351 |
1,059 |
|
2,530 |
3,347 |
|
7,298 |
10% discount factor |
|
|
(183) |
(475) |
|
(1,825) |
(2,155) |
|
(4,638) |
Standardized measure of discounted future net cash flows of equity-accounted entities at December 31, 2011 |
|
11 |
168 |
584 |
|
705 |
1,192 |
|
2,660 |
Total consolidated subsidiaries and equity-accounted entities at December 31, 2011 |
9,056 |
4,776 |
19,860 |
11,014 |
11,428 |
2,731 |
4,261 |
1,772 |
64,898 |
|
|
|
|
|
|
|
|
|
|
December 31, 2012 |
|
|
|
|
|
|
|
|
|
Consolidated subsidiaries |
|
|
|
|
|
|
|
|
|
Future cash inflows |
30,308 |
38,912 |
108,343 |
56,978 |
53,504 |
7,881 |
11,008 |
4,957 |
311,891 |
Future production costs |
(5,900) |
(8,190) |
(18,555) |
(14,844) |
(9,561) |
(2,854) |
(2,520) |
(921) |
(63,345) |
Future development and abandonment costs |
(3,652) |
(7,511) |
(8,412) |
(6,873) |
(3,802) |
(1,974) |
(1,502) |
(197) |
(33,923) |
Future net inflow before income tax |
20,756 |
23,211 |
81,376 |
35,261 |
40,141 |
3,053 |
6,986 |
3,839 |
214,623 |
Future income tax |
(6,911) |
(15,063) |
(44,256) |
(21,348) |
(10,293) |
(903) |
(2,906) |
(1,181) |
(102,861) |
Future net cash flows |
13,845 |
8,148 |
37,120 |
13,913 |
29,848 |
2,150 |
4,080 |
2,658 |
111,762 |
10% discount factor |
(5,519) |
(2,630) |
(16,539) |
(4,976) |
(17,943) |
(496) |
(1,337) |
(1,030) |
(50,470) |
Standardized measure of discounted future net cash flows of consolidated subsidiaries at December 31, 2012 |
8,326 |
5,518 |
20,581 |
8,937 |
11,905 |
1,654 |
2,743 |
1,628 |
61,292 |
Equity-accounted entities |
|
|
|
|
|
|
|
|
|
Future cash inflows |
|
1 |
658 |
3,594 |
|
6,689 |
18,132 |
|
29,074 |
Future production costs |
|
|
(203) |
(576) |
|
(2,216) |
(5,003) |
|
(7,998) |
Future development and abandonment costs |
|
(1) |
(17) |
(101) |
|
(1,061) |
(2,563) |
|
(3,743) |
Future net inflow before income tax |
|
|
438 |
2,917 |
|
3,412 |
10,566 |
|
17,333 |
Future income tax |
|
|
(36) |
(1,291) |
|
(795) |
(5,729) |
|
(7,851) |
Future net cash flows |
|
|
402 |
1,626 |
|
2,617 |
4,837 |
|
9,482 |
10% discount factor |
|
|
(206) |
(962) |
|
(1,747) |
(3,621) |
|
(6,536) |
Standardized measure of discounted future net cash flows of equity-accounted entities at December 31, 2012 |
|
|
196 |
664 |
|
870 |
1,216 |
|
2,946 |
Total consolidated subsidiaries and equity-accounted entities at December 31, 2012 |
8,326 |
5,518 |
20,777 |
9,601 |
11,905 |
2,524 |
3,959 |
1,628 |
64,238 |
|
|
|
|
|
|
|
|
|
|
December 31, 2013 |
|
|
|
|
|
|
|
|
|
Consolidated subsidiaries |
|
|
|
|
|
|
|
|
|
Future cash inflows |
28,829 |
33,319 |
92,661 |
58,252 |
50,754 |
12,487 |
10,227 |
5,294 |
291,823 |
Future production costs |
(6,250) |
(6,836) |
(16,611) |
(15,986) |
(9,072) |
(3,876) |
(2,379) |
(1,417) |
(62,427) |
Future development and abandonment costs |
(4,593) |
(6,202) |
(8,083) |
(7,061) |
(3,445) |
(3,960) |
(1,561) |
(279) |
(35,184) |
Future net inflow before income tax |
17,986 |
20,281 |
67,967 |
35,205 |
38,237 |
4,651 |
6,287 |
3,598 |
194,212 |
Future income tax |
(5,776) |
(12,746) |
(35,887) |
(20,491) |
(9,939) |
(1,391) |
(2,387) |
(1,093) |
(89,710) |
Future net cash flows |
12,210 |
7,535 |
32,080 |
14,714 |
28,298 |
3,260 |
3,900 |
2,505 |
104,502 |
10% discount factor |
(5,048) |
(2,110) |
(14,327) |
(5,619) |
(16,984) |
(1,683) |
(1,353) |
(1,201) |
(48,325) |
Standardized measure of discounted future net cash flows of consolidated subsidiaries at December 31, 2013 |
7,162 |
5,425 |
17,753 |
9,095 |
11,314 |
1,577 |
2,547 |
1,304 |
56,177 |
Equity-accounted entities |
|
|
|
|
|
|
|
|
|
Future cash inflows |
|
|
524 |
4,041 |
|
262 |
17,239 |
|
22,066 |
Future production costs |
|
|
(164) |
(1,465) |
|
(38) |
(5,467) |
|
(7,134) |
Future development and abandonment costs |
|
|
(17) |
(85) |
|
(73) |
(2,299) |
|
(2,474) |
Future net inflow before income tax |
|
|
343 |
2,491 |
|
151 |
9,473 |
|
12,458 |
Future income tax |
|
|
(20) |
(1,617) |
|
(61) |
(4,156) |
|
(5,854) |
Future net cash flows |
|
|
323 |
874 |
|
90 |
5,317 |
|
6,604 |
10% discount factor |
|
|
(175) |
(401) |
|
(20) |
(3,681) |
|
(4,277) |
Standardized measure of discounted future net cash flows of equity-accounted entities at December 31, 2013 |
|
|
148 |
473 |
|
70 |
1,636 |
|
2,327 |
Total consolidated subsidiaries and equity-accounted entities at December 31, 2013 |
7,162 |
5,425 |
17,901 |
9,568 |
11,314 |
1,647 |
4,183 |
1,304 |
58,504 |
