CXY cougar energy limited

Appealing to more of the 'business' folks out there; what kind...

  1. 4,234 Posts.
    Appealing to more of the 'business' folks out there; what kind of comparison does a 7.1 year payback for a project make with other investment 'options' out there.

    The reason I raise this point is that I have developed a few business models for renewable projects (wind/solar) and they came out with comparitive payback periods, if not less. Naturally the big advantage of UCG production is that the resource is assured whereas wind and solar you have so many factors that can interupt production like diurnal variations, changing seasons, weather, etc.. These have to be factored in but still pose a degree of risk as well as unreliability of the project. the levels of 'risk' involved with a UCG project should be lower as you could almost bank on it being a solid producer and getting the project paid back.

    One final point as well, I think we should also keep in forefront of our minds when considering the project economics, how they might vary in a carbon constrained pricing environment and how this might change the economics of the project through its life. My expectation would be that it would improve them considerably. If you consider the progression of the 'carbon is bad mmm..k' ideal; in 2015 is the outlook going to favour more or less carbon production. Then think where we will be in 2030..and so on. I can see the potential for improving economics with the proposed project over time.

    Any thoughts?

    SF
 
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