Thanks PSI, I appreciated your explanation. May I give a slightly different explanation though- which might help make the penny drop for some? Thanks.
Petroleum has several different fractions- I will use the popular terms rather than the technical terms though.
There is crude oil- that is the really profitable one to find- getting harder and harder to find though.
There are your gas fractions- sales gas is one term used. The stuff that powers your stove etc. LNG is simply sales gas that has been compressed to make it far far cheaper to transport. Location is essential to the economics of gas- the LNG process allows gas to be taken cheaply to far away markets.
Wet gas usually refers to a gas field that has condensate- called condensate because it becomes a liquid when it comes out of the ground with the gas. Condensate is worth almost as much as crude- it varies though. This is where the real profits are for a gas project- gas can be a nuisance but you cannot just flare it these days and just take the condensate. We knew this was a bad thing to do even before Greta was born.
LPG is also a liquid that can come with gas. You can leave it in the gas and send it down the pipeline- or you could extract it for additional dollars.
Correct me gently if I have made any howlers. I have tried to keep it simple. If you are interested in the sector and want to compare projects and producers etc- then it may pay you to learn about the different petroleum fractions because the economics- profits- are really quite different.
And I find it fascinating. And I know that WPL have heaps of the good stuff.
IMHO DYOR etc etc
WPL Price at posting:
$17.52 Sentiment: Buy Disclosure: Held
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