Was in attendance at the Lake Charles shareholder meeting... glad i made the effort to be present. Was very worthwhile meeting our team, getting a read on their characters and walked away impressed and happy with our leaders leading our charge.
Key take-aways were:
-- If we reach 6mt and it doesn't look like we'll secure the remaining 2mt in the near future, we should be able to proceed. Any less than 6mt will not make the project feasible.
-- The company obviously needs to lock in a couple of 20yr contracts to have that guaranteed long term financial security but would entertain 5-10yr contracts to make up the remaining quota.
-- Reasoning behind the decision not to go ahead with redomiciling (for the time being) is to focus on marketing efforts because discussions are "heating up". Buyers are aware that the market is going to tighten by 22/23 but are sitting on the fence as there's no need to jump in while market conditions are in their favour. What's promising in that regard is --> there are a lot of short term contracts being signed for 3-5yrs, expiring between 20/23, to take advantage of weak pricing opportunities but... when those contracts approach renewal period, highly likely they will seek long term contracts to guarentee stable, consistent supply when demand soars.
-- Could put the first shovel in tomorrow but in doing so, would start the FERC time clock. Relationship with EPC holder KBR is strong. They are ready to get cracking/ go to work... they don't have much business going on currently or in the short term (according to GV) so they're simply raring to go!
-- VGS deal has expired, with no further developments to renew.
-- A question was raised that IF we couldn't get customers signed up in 2018 and our cash ran out, would you scrap the project then call LNG LTD a "technology company", with ownership of OSMR. Response, " we would use OSMR to get cash flow trickling in but would not scrap Magnolia... will look in-to additional ways to raise capital once more. We consider ourselves a project development company ". On a side note - OSMR does have proof of concept as it is currently being used in transporting trucks in North West Australia.
While GV spoke during the meeting i paid close attention to his demeanour while under the spotlight from mostly a frustrated line of questioning from restless shareholders and here's what i determined : He's a straight shooter, great speaker and IMHO genuine with his word. I can assure you he's doing his best to get Magnolia across the line and sympathises with our position. He did get a touch edgy or appear slightly ruffled at times with folks voicing their concerns over when offtake agreements will be signed... an indication he seriously understands and just as eager to get the show on the road!
When i spoke with JB... loves talking about the LNG industry and very passionate about his job. He mentioned that if the 150mt avalanche of supply didn't hit the market in late 2014/15, Magnolia would well and truly be under construction today! That is fact... we just missed the boat. Now we're ready!
I ventured to the proposed site and its a beauty!! Located a stone throw away from Trunkline LNG Terminal (5 min drive) - 88kms (1hr 7) from Cameron, 111kms (1hr 28) from Sabine Pass - in the Calcasieu ship channel... there were a few massive tankers docked close by while seeing one casually lumbering along through the Port of Lake Charles. Its not hard to imagine behemoth LNG tankers pulling up in 4-5 years time...
LNG Price at posting:
43.0¢ Sentiment: Buy Disclosure: Held
