Wall Street Journal writes up Santos, Arrow Energy and others and extolls the development of coal bed methane stocks in Queensland and conversion to LNG. Lots of interest from overseas in this sector.
GLX project is several months away from confirming JORC AND quality of their lignite to produce gas to diesel along with due diligence on capability to produce 30,000 bpd of diesel. Diesel must be worth at least US$3.00 per gallon with a US$30 per barrel production cost. So each barrel of diesel is worth around US$132 per barrel, less production cost of US$30 leaves US$102 free cash (less finance costs for plant). That is US$102 x 10,000,000 barrels = US$1,020,000,000.
The banks will love to finance this type of project. My guess is that the gas recovery plant and conversion to diesel plant will be on the order of several hundred million dollars. The electric plant will probably be another several hundred million. For arguments sake, lets say A$1 billion all up for plant, mine development and associated equipment, on reasonable financial terms, payments say of A$100 million per year (interest and principle).
The electric plant will produce 500MWH of electricity and sell 250MWH. I do not know aussie rates for electric power but assume around A$50 MWH (which is very cheap by US standards). This produces additional revenue of A$100 million.
I do not know about the sulfur, the tars sands mines in Alberta cannot sell the stuff and they pile it up in giant pyramid dumps. Maybe their is a difference in the quality if the sulfur is removed in a "hot gas" stage as opposed to a wet process as used in tar oil mines. So i cannot comment on any price guesstimates but some of it could probably be made into sulfuric acid which would be in good demand by metal refiners.
Technically GLX appears to be breaking to the upside at 17.5 with some selling ahead (1 million at 18) but the chart pattern appears to be indicating a major move to the upside could take place. I imagine that a number of heavy hitters are doing their due diligence on GLX, there seems to be a steady stream of buying going on, the oppies already hit 10 yesterday which seems indicative of a major move ahead. good luck to all longs
GLX Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
