Ann: Update on Central Processing Plant Commissioning, page-107

I don't think a lot of holders appreciate what's just happened here. PEN was already riding a fine line with the previous delays and budget increases, but this latest big delay means they can't meet their contractual obligations anymore. That's real bad. They'll need a big raise to buy on the spot market, or borrow pounds from someone, or pay a big penalty fee or something. The big upside of PEN was that they could produce more than their contracts and sell on spot, but they've fallen behind now. The contracts are much higher in coming years, they may not have any extra pounds to sell on spot for years. And the contracts are bad, they'll make essentially zero profit from them. Without any profit they'll need to keep raising and raising to keep development of the project going. The "breakeven" point wasn't when development spending stopped, just when revenue coming in covered the costs.

And all this is assuming there aren't MORE problems. More delays, more budget blowouts. Even if the plant is economic, the company will be dead or diluted to oblivion before it matters. Those contracts are cinder blocks chained to our legs and we've taken yet another big step towards the edge of the pier. A big gust of wind and it's all over.

PEN needs either very generous government funding, a takeover offer, or big sector/spot price hype to save them now. Otherwise it's going to be a lot of large, ugly cap raises. Institutional investors will demand HUGE discounts, they know they have the company on the ropes. I've sold half my shares, so far. Fortunately mostly purchased in that November dip so not much of a financial hit. Mostly I'm just pissed at the missed opportunity, could have bought BOE instead. Right sector, right timing, wrong company. In an overpriced market across the board with not many good investing options, it stings that a company with so much upside potential like PEN has flopped. Not that I'm all that surprised, just disappointed.

Sigh.