The progress report on the LNG feasability study commissioned by Metgasco is good reading.
The sentence " With LNG sales of 1.5 Million tonnes / year and a conservative LNG price of $10/mmbtu, the project would realise total revenues of USD 29 Billion over a 20 year life"......... "First LNG sales could occur in 2019" subject to various caveats.
1) This is a huge potential revenue stream for a company with a market cap of approx 82 million AUD !... 1.45 billion USD per annum. This is approx 5 AUD per share using the current number of shares on issue today (approx 252 million) on issue. Of course, before commercialisation is finalised by 2019, there will be development expenses and share issues which will change the revenue per share.
2) It is clear to me that Metgasco with these reports and preparation are very well armed to enter into commercial negotiations, knowing full well the value they are bringing to the table.
3) Another poster pointed out that the development is based on current reserves (all from PEL16). The recent accouncement about the CSG reserves from PEL13. Due by July 2011 could in my opinion be of a similar size to PEL16. On top of the CSG there is also the conventional gas fields.
4) Metgasco in August 2010 announcement said "Internal estimates indicate that there may be sufficient gas resources present within PEL 16, 13 and 426 to supply an LNG plant of up to 3 million tonnes per annum"
5)It would appear that Metgasco could supply MULTIPLE 1.5 Million tonne LNG projects and are using the 1.5 million Tonne report from Worley as a benchmark study.
6)Potential revenue streams may actually be higher if multiple LNG projects of 1.5 million tonnes are progressed.
Good buying for long term holders at these prices. Needs more recognition.
Regards DB
MEL Price at posting:
32.0¢ Sentiment: LT Buy Disclosure: Held
