What amazing buying opportunity yesterday was. At 60 cents you can value EPG on just the Gazonor purchase alone.
Gazonor had over 25 years produced 75PJ or an average 3PJ/year. In the last year this has declined to 1.4 but we are talking about a company that had effectively no leadership or ambition to produce gas. This will change now that EPG owns the company.
Assuming 3PJ/year production (3,000,000 GJ/year) and a price of 8 Euro/GJ, exchange rate of 60cents/Euro
Revenue is 40 million AUD
Costs have been 3.60/GJ but will decline as production ramps up. The Avion site has a production cost of 2.8/GJ due to the larger flow rates there.
Costs of 3.6/GJ comes out at 18 million AUD
A 22 million operating profit on 250 million shares (assuming conversion of notes) is 8.8 cents/share.
For a utility style company that is cheap add also the upside of the other permits and it represents exceptional value
cheers Icharus
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