GasBaron
The following is not financial advice and readers should do their own research.
Just my opinion but if in doubt why don't you simply contact Galilee and get their side of the story.
A few general thoughts...
I know Jemena pretty well, having been closely involved with them when the NGP was built and it is pretty clear that the pipeline to the Galilee basin is part of their overall Northern Australian Pipeline strategy. Without speaking for them I expect that one way or another they will simply work towards connecting the NGP to Wallumbilla hub. IMO they are definitely in this for the long haul and the Galilee Energy pipeline to market is very much aligned with this strategy & it is not hard to see why Jemena entered into an MOU with Galilee.
I would not be surprised if prospective transactional buyer/s for Galilee weren't already communication with Jemena in much the same way as CTP's CEO did with the NGP because the Galilee pipeline to market is part of a much wider picture.
Whilst I don't always agree with everything that the author of Canaccord's reports says IMO he does a pretty good job of tying everything together and they usually contain information of great interest.
I am on the list to receive the ASX broker reports each week and as Canaccord are on short list of the Friday batch about 10 published ASX reports each week it is my guess that brokers tend to read them. In any case their introductory report clearly summarised their basis of operation with Galilee Energy.
My personal vision for the project is for a 200TJ/day spur to the Galilee tenement and as far as I know the pipeline will most probably use the pretty standard amortisation period of 30 years. (Which will be only partially dependent on haulage from the Galilee Basin).
I have undertaken an extensive modeling exercise working with one of the world's leading suppliers of O&G plant focusing on the economics of ESP's and gas lift pumps in the galilee coals..
In this exercise I have drawn upon the tremendous world wide body of knowledge related to draining underground coal seams in coal mining industry using horizontal wells and have applied it to the Galilee model.
A simplified version of this type of model was published on the Elixir Energy site and rather than being a pub fight starter it ended up on the HC leader board.
At this stage however I do not propose to publish the galilee model which is a much more definitive exercise.
Drainage wise I am personally confident that obtaining desorption pressure on a large scale say 200 TJ/day development in the Galilee Coals, is very achievable and have costed the whole developed operation using the dewatering techniques borrowed from the mining industry.
My vision for the Galilee project is that Galilee will on sell it to one of the O&G majors after sufficient 2P certification is obtained.
This is where it gets interesting and even though I bought in at 14C I did not sell at $1.20 because once the dewatering technique for Glenaras is proven then piloting of the other areas in this tenement is more or less a matter of course and a prospective buyer may choose to buy the show at a discount by getting in early.
My guess is that Galilee could come into play for a transactional offer at any time from that point onwards particularly if the Kumbarilla core wells look good.
SO IMO the development of the field/s will be done by the transactional purchaser and do not represent a financial burden to Galilee.
In the interim, a simple opportunity for revenue exists with the Galilee MOU with Clarke Energy to sell power to Barcaldene and get cheap electricity to run the piloting pumps but this is insignificant compared with a 200TJ revenue stream.
Peter Lansom has done all this before and has assembled a team that are amongst Australia's best.
https://www.santos.com/news/santos-to-acquire-100-of-eastern-star-gas/Its not hard in the back of a cigarette packet 0.50/GJ of 2P reserves divided by the number of Galilee Shares. Bit rough I know but it's a start.
Before I retired I was involved in the largest of the QLD CSG projects as were a number of my fellow Galilee shareholders.
Importantly the Galilee share register is full of sophisticated CSG investors and IMP it would be almost impossible for a low ball SOA to succeed.
Best Regards
OGP
