Goodmorning, rise and shine! I never said the journey would be...

Goodmorning, rise and shine!

I never said the journey would be easy, I only said it would be worth it! For those long term holders who have been holding for years, seeing past the rough seas while continuing to keep the faith - the hard earned dollars for perseverance will soon pay off! I remember back in early 2016 when GV took over the helm... Magnolia was flying under the radar, a relative minnow amongst much larger US, aspiring export projects hoping to catch the next wave. In Jan 2017 "our ant" appeared on the front cover of the LNG Industry magazine then grabbed more of the spotlight at the Barcelona Gastech LNG Summit later that April. Since then we have strongly grown to prominence... appearing in countless press releases as one of the favourable candidates to ride in on that wave along with; Corpus Christi Train 3 (FID reached), Driftwood, Calcasieu Pass, Sabine Pass Train 6 (fully approved), Delfin "brownfield project" (fully approved) & Golden Pass. If the chart released from our company August 8 "regulatory status - competitor analysis" serves to be correct... Driftwood/Calcasieu Pass receiving "Final FERC Order" mid 2020..... it should now be a 2 horse, FID race between us and Cheniere considering Delfin has no EPC contract or financing in place.

Just can't see China imposing tariffs on US LNG imports, they'll be shooting themselves in the foot! China will have to pay a premium price to find gas elsewhere, although Qatar can supposedly produce & ship LNG for a purported $5.60 MMBTU... but has restrictions on how much gas they can produce down the track (23mt will be up for grabs once North Field expansion is complete). I believe once the dust settles from this ongoing trade war, China will sign on the dotted line promptly. We know Europe wants to diversify away from Russia, who has a stranglehold on Europe... Russia though currently doesn't have any gas to sell! Will give you the following statistics from worldwide, leading natural gas exporters in 2017. * Note, gas sales include LNG + Pipeline & Unk = unknown;

   Gas Field Production Imported Country's Consumption Gas Sales

Russia   470.3   13.9 314.3 170.7
Qatar 130   Nil 35 89.9  
Norway   91.1 Nil 3.3 85.1
USA   543.5   61.3   547.2 61.7
Australia    83.9 4.2 31   56
Algeria   67.4 Nil 28.7   39.2
Netherlands 27   30.2    26.7    32
Malaysia    58    Nil 31.6   26.7
Indonesia 50.3    Nil   29 21.7
Nigeria   34.9    Nil Unk   20.5
Trinidad & Tobago 25    Nil Unk   9.9
Iran   165.6 Nil 158.6 9.2
Myanmar   13.3 Nil Unk   8.5
Oman 23.9 Nil 17.2    8
UK 31 37    58.3   7.9
Brunei 8.8 Nil Unk   6.7
UAE   44.6 12.1 53.4   5.6
Egypt 36.2 Nil 41.4   .88

Canada    130.4    17.7 85.6   Nil

* Source BP

Russia can expand field production & sales greatly between 2020-25'... the Bovanenkov field is currently producing 61mt and slated to reach 85mt by 2020. Chayanda/ Kovykta fields will both produce 18.5mt each but 28mt of that capacity is already contracted to go to CNPC through the Power Of Siberia pipeline, to be completed early 2020. Kruzenshternsky field 24.4mt expected completion 2022-2024. South Kirinskoye field 15.5mt scheduled for 2023. Salmanovskoye/ Geofizicheskoye fields 6.1mt for the Arctic 2 LNG project scheduled for 2023.   

Norway has one new field to come online by end of 2018, Aasta Hansteen 5.1mt.  

Once the giant Zohr field in Egypt reaches full production, Egypt will be self sufficient in 2019 becoming a net exporter again. In 2012/13', the country cut LNG exports due to own energy crisis - previously could export 12.7 mtpa.

So as the figures above determine, there's very limited sources worldwide to buy cheap natural gas from in the future... making low cost, reliable US gas very attractive! Even if the Chinese put tariffs on US LNG, we'll comfortably be able to find other homes!