intellectual property ?, page-15

My feeling is that today was product of traders leaving and frustrated longer-term holders dealing out upon resolution of the drawn out DERM uncertainty. Both the latter and the former were no doubt hoping for more of a pay-off than the +15-20% increase which we saw. If not for the disgraceful manipulation of the SP on Friday (noting that the protagonist(s) have since been rightfully suspended from HC), the spike would have sent the SP into the .40s and probably encouraged some of those frustrated holders to stay on.

There is plenty on the horizon to send the SP higher. Achievement of each key milestone leading up to the provision of energy to the grid in a few months time will restore optimism and progressively dispel any residual doubts about the process. DERM have been through the process with a fine tooth comb. Through this they have been nothing if not risk-adverse, so we should take comfort that they have publicly affirmed their faith in the process, including plans to scale up to multi-panel operation in the middle of the year.

Of course, the bitter taste many holders have from the overly drawn-out nature of DERM's assessment will mean that greater significance will be apportioned to the commencement of works on the Chile project. This applies equally to any future announcements regarding new opportunities outside of Queensland. On this point, I have progressively come to regard the 5MW and 25MW trial plants as instruments for penetration into new markets, rather than ends in themselves. Linc came to this conclusion with Chinchalla some time ago. Bluegum may yet happen, but I expect to see an international ammonia project with IPL (the terms of its partnership with CNX are specifically international) before we see anything beyond 25MW in Queensland. The company's anticipated market-entry strategy for the US (including a North Amercian office?) is a pointer to this.

So where does this leave us CNX holders? Surely up is the only way to go.

I like your enthusiasm Dashjt. While I haven't yet read the report, apparently Southern Cross Equities agree with you - lower bound target SP of $1.00. Personally, feel you may be a bit optimistic (it's got a long way to go...), but I think we may see a doubling of the SP to .60+ by June provided the timeframes outlined by the company are successfully met.

Mocfan - regarding the advantages of CNX IP, I've plagiarised the following from their website:

"Carbon Energy can evaluate the feasibility of UCG on a particular site, design the optimum UCG layout, model the gas composition that will be produced and determine the optimum configuration for the use of the gas. For example, Carbon Energy can determine the configuration of power and liquid fuel options and hybrids that will produce the best outcome economically and environmentally.

Carbon Energy�s proprietary tools provide real time process analyses to identify the causes of variations in the underground gasifier performance and to make timely changes to operating conditions to continuously maintain gas product quality. An important component of the environmental control modelling is the Cosflow technology, originally developed as a project between CSIRO and the Japanese government. This program allows the impact of coal extraction on the surrounding strata and hydrology to be accurately predicted and problems avoided."