Fresh From The Cupboard, page-866

Thought about not posting today because of the 20%+ drop, but f#@& it, LNG investors are used to this sort of thing so before the upcoming Sydney AGM on 15 November 2018, let’s have a look at some facts:


September Quarterly Cash Outflow

Net operating cash outflow for the quarter was $4.8 Million.

Approx: $2.5 Million in staff costs and $1 Million in administration costs (in $US).

No cash inflow from investing or financing activities

$407,000.00 paid to Directors


Expected Cash Outflow for the next Quarter

Approx: $2.7 Million in staff costs and $1.3 Million in administration costs ($US)

No cash to be spent on advertising and marketing


Those that believe in LNG’s OSMR technology, its small scale modular design and the story itself should perhaps way up the prospects of a new team taking charge, rather than fear change and fall victim to scare tactics used by the BOD and management who have speculated for a number of years now, and will of course be urging investors to weigh up the options of cash losses and project / time disruptions resulting from a spill. A vote against remunerations does not automatically lead to a board spill, it leads to whether a vote for a board spill would occur, in other words, to quote lilac, it puts them all on notice, and just to be clear (as Timbo says) I wouldn’t vote for a spill.

However, disappointingly management aren’t changing their rhetoric or their approach by the look of today’s quarterly release. Here are some of their comments followed by some of mine. Unlike LNG, I will apologise for my comments in advance, as it’s my way of expressing my cynicism towards management’s failure to change their approach!!!! Today’s Quarterly states:

1. “The final investment decision for LNG Canada has brought additional attention to the need for LNG export projects on both of Canada’s coasts, and we believe Bear Head is the next best option. Our team used the summer to perform field work to fulfil some of the project’s environmental regulatory obligations”. Yep, I heard the same thing about Fishermans Landing!!!!

1. “We remain hopeful in our ability to bring a final investment decision for Magnolia LNG to the Board of Directors in the first part of 2019”. I remain hopeful of winning Lotto and Powerball too, but hoping and speculating doesn’t mean achieving. I note also that management are now saying “hoping” when previously they were saying “confident of”

1. “There are varying opinions on how and when the trade issues with China will be resolved”. I think all on the threads have read HC’s resident expert on all things LNG LTD and Twitter giving his opinion on the trade dispute, he also told us last year that the SP would soon be $5.00 and we had better snap them up at last year’s “ridiculous and crazy low prices”. I do however think he is doing a great job posting comments in large print highlighted in a lovely shade of scarlet that can be appreciated by all but the visually impaired. I just wish that someone with a more informed opinion on the trade war would speak up!!!!

1. “Considering that, our communications with potential Chinese offtakers remain robust with the intent to complete agreements if trade tensions abate before Magnolia is fully sold out”. OMG, like what does that even mean!!!!”

1. “On September 27, 2018, LNGL announced that Magnolia LNG and Meridian LNG Holdings Corporation agreed extension of the financial close date of their legally binding 2.0 mtpa offtake agreement to December 31, 2018”. I don’t know why GV always fails to mention that Meridian’s contract is only binding if Magnolia reaches FID!!!!

Recently I posted achievements made by Maurice brand as opposed to Greg Vesey; here it is in more detail:

Achievements made by Maurice Brand

Magnolia - Acquired rights to site and leased Magnolia property
Magnolia - Designed liquefaction configuration
Magnolia - Performed FEED for Magnolia
Magnolia - Signed binding turnkey EPC contract
Magnolia - Agreed detailed construction implementation plans
Magnolia - Agreed detailed O&M transition and operating plans
Magnolia - Aligned with industry leading service providers
Magnolia - Acquired LNG - DOE approved changes to Non FTA countries
Magnolia - LNG progress project process with FERC
Magnolia - LNG receives FERC order
Magnolia - Acquires Final EIS from FERC

Bear Head - Filed for US DOE Export Licence
Bear Head - Acquired the last of Initial Approvals
Bear Head - Acquired DOE Approval of Exports to FTA Countries


Achievements made by Greg Vesey

Magnolia - Receives NTP
Magnolia - Finalises financing


To continue looking at some facts before the AGM, my next post will look at Management’s and Directors base pay, remunerations, incentive rights and the dilution affect they have on our shares.