Now , if your revenue assumptions are correct, and we do need to...

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johno557

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22/10/22

19:44

Post #: 64339884
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Originally posted by SpiderMonkeyZ: ↑

"I guess that the capacity of the pipeline and plant to take helium must be known and from that, you could estimate the maximum annual production and work that back to how much money the company will be earning and from there have a rational basis for a target share price."

The plant capacity might be 500mcf/day of helium per the Paradox website. With an 80/20 revenue split in favour of GGE I believe for GGE gas that would go through it. Noting the plant might source gas from wells other parties nearby so the full capacity may not be available to GGE not sure.

Currently GGE have 3 wells I think planned so if all in a great case could be 90mcf/d each well of helium or 270mcf/d total for those 3 wells.

Potentially the maximum revenue using the Paradox plant is 500mcf/d of helium multipled by pricing assumptions minus 20% to Paradox and other expenses. I've done some calculations below using US$400/mcf, US$600/mcf (US$605/mcf mentioned in a GGE presentation) and US$1000/mcf if all spot prices. Then converted to AUD at 0.63. That gives a range of AUD$92m to AUD$231m per year of potential at 500mcf/d for the 80% to GGE before expenses.

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Now , if your revenue assumptions are correct, and we do need to state they are assumptions only while the plant has that capacity i don't think the plant has the capacity to refine that amount at 99.9 % but hay let's run with it, the average mc for a company on the assumptions with a revenue of 92mil after costs is $632mil so if even half that in a few years gge would be a game changer
thanks for your analysis

GGE Price at posting: 1.6¢ Sentiment: Buy Disclosure: Held
2 Upvote

0 Great analysis

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