Ann: Amsterdam Construction Update, page-4

Yeah I like it. I originally bought in here and thought it was a bit of a toss of a coin, boom or bust but I liked the upside but those financials are very enticing. Its hard to see what they exactly are, but appears that the cost of producing a litre of fuel is about 20c (which I assume includes the now input credit for waste plastics rather than input costs) which is outstanding.

Now they have used a pricing metric that they will never sell to, ie. they are not planning on selling directly to petrol retailers so it is a bit misleading but it does contain some excellent info.

At 20c / litre, that's the equivalent of $22.90 / barrel and it appears that that will include DD&A of the facility which is outstanding. Most oil assets will be at or above $30 / barrel even for the best cheap light crude.

With the change to the ISO shipping standard coming in a little over 12 months demand for light crude will remain and probably increase. I'd expect the disparity in light and heavy crude to drop and as demand will grow for light crude but supply unlikely to move I'd assume we may see a price rise in oil over the next 12 months. Most of the new oil coming on is heavy and high in sulphur from tar sands / shale and not suitable any longer for shipping. It will take time for changes to refining systems to filter through.

I only took a small position but thinking of a greater one, at higher oil prices in a few years time when 2/3 facilities are online then I'm hoping to look back on this share price thinking it was a steal. The $90m lending facility is the jewel in the crown here too, there aren't many companies that trade in oil that can get that sort of backing without using RBL facilities.

If they can achieve the sort of margins they are indicating then the borrowing should be maintained at a feasible level as they continue to expand as previous drawdowns are paid back through operating cashflow enabling the same facility to be used for the next plants.

Just a quick question to those a bit more in the know, the $10m stated in this release is that the full cost of constructing the plant in Amsterdam. For my modelling I've tried to be conservative and used $20m but if its closer to $10m then even better.