Fact: if shell FLNG is successful, it opens up a new field of opportunity to produce natural gas offshore. An interesting observation is that Shell builds its floating LNG plant in Korea, possibly due to cost-efficiency.
The gas supply will roughly match the consumption by 2022, due to increasing supply from Australia, US and etc.
While the onshore oil supply is already ramped up with little room for production growth, future oil supply needs to come from offshore.
The way I see MMA is that
1. yes, natural gas project will still be booming in Australia until 2020 but not forever ( 6 years from now), when supply reaches consumption level.
2. on the other hand, oil demand will outstrip oil supply, because onshore oil production can not increase further. Other production will have to come from offshore oil fields.
Why I invest in MMA, I know it will still have relatively booming business opportunity from natural gas industry for at least another 6 years.
If it can secure more contracts and form alliance with offshore oil projects, it will have businesses for at least the next 20 years. I also expect JAYA will reduce MMA operation cost and provide more "technically-advanced" services in Asia.
Its current P/E is about 8. All I know is that it will generate 100% of my capital in 8 years (I literally own my shares for free, after 8 years from now)
Big questions: Will earning per share will be higher than the current level for the next 8 years? I cannot guarantee, because it depends on MMA's ability to secure the contract for future offshore oil project. But, the number of offshore projects will inevitably increase.
Opportunity is there, I have faith in the MMA's management team to fetch it!
MRM Price at posting:
$2.02 Sentiment: Buy Disclosure: Held