How much did Petro Stopping Center add to its oil and gas properties in 2024?
Petro_Stopping_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
impairment tests are reassessed each year and, in 2024, the post-tax discount rate was 8% (2023 8%) other than for renewable power assets. Where the CGU is located in a country that was judged to be higher risk, an additional premium of 1% to 3% was reflected in the post-tax discount rate (2023 1% to 4%). The judgement of classifying a country as higher risk and the applicable premium takes into account various economic and geopolitical factors. The pre-tax discount rate, other than for renewable power assets, typically ranged from 9% to 20% (2023 9% to 20%) depending on the risk premium and applicable tax rate in the geographic location of the CGU. For renewable power assets, which were tested primarily on a fair-value basis in 2024 (including those in equity accounted entities) tests were performed using a post-tax cost of equity-based discount rate range of 8.75% to 9.5%. In 2023, tests were performed on a value-in-use basis using a post-tax WACC-based discount rate of 6.5%.
Oil and natural gas properties
For oil and natural gas properties in the oil production & operations and gas & low carbon energy businesses, expected future cash flows are estimated using management's best estimate of future oil and natural gas prices, production and reserves and certain resources volumes. Forecast cash flows include the impact of all approved emission reduction projects. The estimated future level of production in all impairment tests is based on assumptions about future commodity prices, production and development costs, field decline rates, current fiscal regimes and other factors. In 2024, the Company identif
Source: Item 23 — RECEIPTS **RECEIPTS (FDD pages 87–131)
What This Means (2025 FDD)
According to Petro Stopping Center's 2025 Franchise Disclosure Document, the company's oil and gas properties had carrying amounts totaling $5,966 million in 2024, compared to $5,938 million in 2023. This indicates an increase of $28 million in the carrying amount of oil and gas properties from 2023 to 2024. These figures represent management's best estimate of future oil and natural gas prices, production, reserves, and certain resources volumes. These estimates also factor in the impact of all approved emission reduction projects.
The FDD notes that the company identified oil and gas properties where the headroom, based on the most recent impairment test, was less than or equal to 20% of the carrying value. This suggests that a relatively small change in factors like the discount rate, reserves, resources, or oil and gas prices could materially impact the recoverable amount of these assets. As a result, there is a risk of impairment reversals or charges in the next financial year. Prospective franchisees should be aware that these valuations are subject to change based on market conditions and internal assessments.
Furthermore, the FDD mentions that management considers reasonably possible changes in the discount rate or forecast revenue, arising from changes in oil and natural gas prices and/or production, could result in a material change in the carrying amounts within the next financial year. This highlights the sensitivity of these assets to market fluctuations and the potential for significant changes in their valuation. The recoverability of intangible exploration and appraisal expenditure is also a factor, as covered under Oil and natural gas exploration, appraisal, and development expenditure.