LNG has about $50m in cash on hand and less than 14k in debt.
Loss is normal, given it doesn't generate cash flows yet. Look at AOE, which is on a loss. AGO is also on a loss too, and its going north. LNG don't have cash generating assets like what supermarkets do, it depends its deals for seeing our LNG technology to clients like AOE, and potentially ESG in near future for its Newcastle LNG project.
Yes, Shell/PetroChina taking over AOE is a worry. Our directors have done a great job and don't need to do anything else in relation to the takeover, as its not within their control.
What is it now up to now, is what action is AOE directors taking (not LNG directors)? They have 2 choices: - give in to Shell/PetroChina offer, which has a Chinese party involved, thus some trouble by FIRB - continue as an independent company with Gladstone LNG Pty Ltd as its pioneer project.
Whichever choice AOE takes is up to them and we can't do anything about it. But you have a choice now, either to: GET LOST AND STOP WHINGING and cash in your losses OR HOLD on for more updates and see if LNG can get a PLAN B partner, in case AOE gives in to the takeover.
As we can properly assume, AOE isn't giving in yet at this stage, given the price of $4.45 plus one Arrow International share. As analysts have said, its unlikely Shell will offer anything more than potential $5 to $5.50, as they have sizable stake in AOE and plus AOE has funding problems, that can prevent a counter party in bidding AOE.
Given the AOE takeover saga, this also reflects the strong international interest in Australian LNG. I am pretty sure that someone would be in the LNG project (as today's AFR article says LNG is looking for other potential parties as suppliers).
A new partner can potential get exposure to our 2 clients: Golar LNG & Toyota with agreed sales.
Possibilities can be: 1. Bow Energy (has over 2300pj 3P gas) 2. WCL/Mitsui alliance, Mitsui has indicated to WCL, that it is keen on exporting LNG overseas, rather supplying it domesticly. 3. others???
So stop BS, and start thinking logic.
I say: LNG - hold until further update on AOE developments.
LNG Price at posting:
54.5¢ Sentiment: Buy Disclosure: Not Held
