NRZ 0.00% 1.3¢ neurizer ltd

Do LCKs Economics Stack Up?

  1. 196 Posts.
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    Hi All,
    I've been putting in quite a bit of time into assessing my portfolio this week to see where (if anywhere) I should shift my capital for short, medium, and long term investments. I own securities in two (semi) comparable (potential) gas producers, one is LCK and one is RLT. I note that RLT is much further along (will begin production next year) than LCK and I've used it as a bit of a benchmark to see what needs to be complete before off-take agreements, JVs and that of the like are realised. I completely understand the difference between UCG, ISG, and extraction for distribution, but essentially the fundamentals of proven/probable reserves and flow rates will be a key factor in determining a strategy.

    LCK
    Share Price - $0.085
    RLT
    Share Price $1.24

    LCK
    Reserve (2P) - 1,153 PJ
    RLT
    Reserve (2P) - 145 PJ

    LCK
    Flow Rate - 7,551,093 scf/d
    RLT
    Flow Rate - 850,000 scf/d

    So, LCK has approximately 8X the reserves and 8X the flow rate, but is 6% of the price of RLT.

    I'm looking to stimulate a bit of discussion to see what the difference is between the two, and whether that will translate to a steadily increasing SP in the coming pre-production years.

    Is the urea/fertiliser market not as sexy as LNG/helium?
    Is sovereign risk too great in Australia?
    Is the location of Leigh Creek an issue?

    Fundamentally, I believe in this project so perhaps I'm not seeing something because I WANT to believe we'll all be millionaires in 2 years. If I bought 30k of shares today (approx 350,000 shares), should I really expect to sell at $2/share and retire in Byron Bay with Chris Hemsworth in 2023? Does an opportunity for a 2-3 years 2,500% ROI exist here?

    Looking forward to ALL (sensible) opinions.

    Anon

    DYOR
 
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