There are plenty of people arguing no glut. I tend to go with them, as analysts continually underestimate the worlds energy needs and the ability of big business to read future energy requirements. They're the ones negotiating long term contracts after all. The current IO situation is a classic example of how wrong analysts can be.
USA shale gas unlikely to be the threat that some make out. Lower ( quality) energy output for a start. Then freight costs, timelines etc. Has been discussed many times. PC from WPL again just recently.
China continues to grow, despite others pessimism and 7% of a large pie is better than 10% of a small pie.
My understanding is that Kar expect to end up with a small(15% say) equity in production which will in turn fund future drilling exploration. Whether that happens, I believe, will depend on timing mostly ( delays like Proteus really upset the cash flow chart), future drilling results, some great Kar negotiating plus a little bit of luck.
A challenge for sure, but achievable with this team.
Cheers, Stevo
KAR Price at posting:
$5.10 Sentiment: Buy Disclosure: Held
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