Covers 4 important investment topics
Coal Bet Methane exploration in MongoliaHydrogen Generation in Mongolia
QLD asset Purchase
Future Share Price
The vehicle is the following Crux Investor Video
https://hotcopper.com.au/threads/new-to-exr-read-this-some-research-that-might-assist.5914754/page-259?post_id=63750395 Many thanks to the HC posters who found it because IMO it is a comprehensive overview of the whole of Elixirs operational portfolio and Matthew Gordon of Crux Investor asks a series of important questions that I am sure are on shareholders minds. FYICruxinvestorhttps://www.cruxinvestor.com/Founder and interviewer Matthew GordonMatthew Gordon is the founder of Crux Investor, a new market insight channel for those interested in understanding the junior mining world and opportunities to invest. Its purpose is to cut through a lot of the jargon, bias and bluster that is prevalent in this sector and hone-in on the most important factors that can indicate whether a company has a strong footing for growth and success.At the beginning of the video this notice appearsThis company has paid for video productionThey have no editorial control or veto rights, and we do not exchange questions before the interview.My (Redacted) Notes on the InterviewThe Bold text summarizes the questions posed by the interviewer.
What Is Going on in the Oil and Gas Markets at the Moment?
The Bifurcation of oil and gas.
Significant premiums for gas in international markets
Role of gas in electricity systems as an unmatchable glue that binds the whole system together
Gas markets dramatically changed for long term
Is It Easy to Raise Capital In the Gas Market?
Gas is greener
Recognition by the EU of that role
When you are faced with a crisis of a lack of supply... fossil fuels are not yet replaceable.
Laws of science say that that will take decades rather than years
How Does it Affect your Mongolian Business if the Gas is to be Pumped East?
To take the gas that normally goes from Northern Siberia to Europe (Nordstream 1)
To take that to China would take about 10 years of engineering and commercial negotiations
With the absence of Western technology, developing new gas sources in Russia would be hard
If I am a Chinese.... a neighbor that is much closer, I will see that as being a reliable and secure source of gas (1,000 TJ/day)
We think that the war has increased the value of immediately proximate gas in Mongolia to Chinese markets
Do you See That Continuing, given the New Paradyme that you have Described?
I think it will ensure to the medium and long term
Is the QLD gas Acquisition Opportunistic or is it a Defonce Mechanism Against Uncertainties in Mongolia?
The Primary driver is opportunistic from internationally raised gas prices
We think our new Queensland acquisition is a quick and nimble response to the changing (European market scenario)
Our technical team are pretty experienced and know the Taroom trough play drilled by QGC when it was owned by BG
Elixir could acquire the asset far mor quickly than a much larger company could ever do
What is the Play Here for you & tell us About the Terms of the Deal?
$500,000 (AU) in cash $3M in company stock and a royalty over the liquids only component of any future production.
It is primarily a gas playIf an appraisal is successful this asset will ultimately end up in the hands of people like Shell.
The key challenge is to have an asset that can attract capital and large company interest
How Mich Money are you Committed to spend on it in Terms of the Appraisal Well Phase and beyond?
Nature of the commitments under the QLD petroleum license are that we have to drill 1 well
We haven't said to the market what that well will cost ... fairly deep and much more expensive than a Mongolian Well
Ways of mitigating the cost by farming out to a partner
The farm out market for this type of asset in a safe country connected to international markets will be very strong
This is only one option to finance the wellHow does this type of thing get structured?
Looking for someone with a large balance sheet
Technical expertise not as relevant
Players could be LNG buyers in markets such as Japan and Korea... could also see German buyers
To overcome distance LNG cargoes can be swapped out.
Will There be More Acquisitions Happening?
Opportunities will need to benefit from our existing skills of directors and technical team
WE DONT STOP LOVING OUR FIRSTBOURN CHILDREN IN MONGOLIA, the CBM and slightly Newer Hydrogen Business
The nature of a resource company is that it takes assets forward using it skills it passes them on to parties at various times
The possibility of occasional failure due to geology or whatever is mitigated by having a sweet of assets
Is Australia the only Duri stiction that you will Look at.... for stranded assets?
We want to look where we have completive advantage
The market would want to see us pass a few milestones first
2 Countries is enough for just now but never say never
How is the Nomgon (Production Pilot) Progressing?
(Logistics) still not back to normal and the Chinese boarder still faces issues.... that lead to some logistical issues to bring in all the equipment and personnel
Just spudded the first of 2 wellsWe plan over the next few months to flow fluid from those wells and flow gas at commercial quantities.
What Time Frame are we Talking About?
The flow test even by this year deliver a result or feed into Q1 next yearPresuming that that result is favorable we will be engaging with the government about a small-scale generator (Feeding the nearby electrical infrastructure, initial gas will be flared)That should lead to the availability of finance for the gas fired power station
The most attractive (Long term) market is in China Itself
There are other local alternatives such as fertilizer whose economics have gone through the roof
Have you got Mich Local Investment into the Company?
Given our history... we have some local partners, and they have some stock
Would you Consider the Mongolian Exchange?
It is feasible and there is some precedent, but it is not on our to do list right now
Where do you Go for the Money?
The primary sources of finance for the power project are the international institutions that have a long history in Mongolia,
the Asian Development Bank & the European Bank for Reconstruction and Development
We have been engaging with those bodies for some time.
We are also talking to those parties about our Hydrogen project intense interest.re Hydrogen...
What do you see in Country that believes there is Margin to be Made and that the Market is Ready?
In the long term our strategy for Hydrogen is the same as for natural gasLook to the South to China ... our analysis is that over time there will be a very substantial need to import Hydrogen In terms of costs...
Green Hydrogen could be produced in the $2.00/KG vicinity which is lower than (Spot) LNG prices and close to parity with contract LNG prices.
Large Japanese company's (SBN) do not usually commit to projects like this without thought
What Can Current Shareholders Look Forward to in months to come?
The natural gas business,
Commercial flow rates from the pilot program which is under way,
The Hydrogen Project
A pre-feasibility study that should deliver something by the end of the year or early next year which will be the catalyst for a legally binding joint venture for FEED (Front End Engineering Design) work on the pilot project.
The QLD project Expect to attract a high quality (Farm in) partner within 6 months.
Right Now, do you Think you Have a Fair (Share) Valuation for Where Its At?Any CEO is going to see that we are undervalued
If the Caty lists of the type that I have mentioned have delivered then rerates should be substantial
We (Elixir) can point to comparative companies in each of our 3 spheres that have market caps in excess of our single market cap Right now, so we think that the multi asset strategy is capable of delivering very significant upside. ... in share price appreciation.Our game is about creating options within the company and ultimately for shareholders as well
End Of Video
My Comments
Whilst I have attempted to reflect the gist of the interview in a relatively unbiased fashion, I strongly recommend that readers listen to the original.
I have made a few sparce comments which are enclosed in brackets.
I have been focused on the CBM initiative and the geopolitical climate, but this interview gave me a really good view of the carefully balanced portfolio of initiatives that Elixir is undertaking.
I am an extremely fortunately individual who has had the privilege of working with some of Australia's leading businesspeople and against this benchmark, I make the following comment very earnestly.
Neil Young IMO a person with a set of exceptional oil and gas centric backgrounds which have already enabled him to achieve an extraordinary amount.
I wish I was his age so that I could witness the exciting entrepreneurial journey I believe he will have in the years ahead.
I also believe he should indeed be proud of his achievements to date.
This interview was a transparent insight into what i now see as a well-balanced project portfolio which harnesses the combined knowledge of the Elixir Chairman, Directors, CEO, their respective business networks as well as being sensitive to genuine input from the shareholders.
Best regards
OGP
(20min delay)