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03/03/21
21:28
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Originally posted by BlueSeal
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I'm not sure if that is correct. They are speaking about "revenue" so that's gross before taxes etc. and they own 50.1% through an 85% stake. That means, we are talking about 42.585% share of 4.2 million€ gross = so i would guess something between 1.0-1.2 Mio.€ net to WGO per year or ca. 1.8 Mio AUD (exchange rate 0,63) net per year at 22% capacity (from my experience, you can run these power stations at a max. capacity of 75-85%)
would be great to know, why it's running at 22% - is it because of the lack of gas or the lack of consumption
If it's consumption, more gas wont help.
If there is a shortage of gas, we need to invest much more money upfront before we can make any relevant amount of money (drilling wells). And it is not really scaleable (max. 8 Mio. AUD per year).
From my perspective, it's just a marketing story.... "we are doing business overseas"....
but - DYOR
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It's a lack of gas.
And 4.2 million is what they aspire to, revenue is only about 800k (no details on actual profits - if any).
Details from Prospex:
https://www.voxmarkets.co.uk/xsrns/25f79107-a80b-4ba4-b652-ea095863452f
https://prospexoilandgas.com/cms/wp-content/uploads/2019/12/El-romeral-estimates-2019.pdf
About a year ago, the 2P was 0.3BCF, and the gas plant consumes about 0.14BCF a year (by my reckoning).
So they need to drill to keep the plant running. The prospects are low risk, so almost certainly they'll find gas. But whether the amount of gas is worth more than the cost of drilling, compression and tie-in is yet to be seen.