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4.3¢ liquefied natural gas limited

Appreciate your numbers and calculations. Will have a look at it...

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sivart

5,940 Posts.

111

07/08/14

15:29

Post #: 13784836

Originally posted by roperdoper ↑

Siv

I always appreciate the commentary on the long term value. Amazing that this thread has been viewed over 15,000 times. I remember when over a hundred views was a good showing.

I had another go at capitalisation of income, similar to the last post i did for Magnolia. On a 16x EBITDA on 8MTPA and 60% interest, I get $13.1 unrisked ($6.4 for 4 MTPA) for Magnolia. I think there is further upside apparent in the capital costs, as latest SKEC number is $1.56bn for 4 MTPA yet investor presentation pack has capital costs for base case at $2.2bn. I appreciate there are ancillary costs but surely not to that delta.

Trying to extrapolate costs and revenue to Bear Head, I get an unrisked value of $3.2 for 2MTPA operation assuming 60% equity interest and 70% project leverage.

I have pasted my tables below.

Column 1 Column 2 Column 3 Column 4 Column 5

1 Magnolia

2 - - Notes 8 MTPA 4 MTPA

3 i. EBITDA Company projections 804,000,000 404,000,000

4 ii. LNG Share Base case scenario 60% 60%

5 iii. LNG EBITDA 60% x (ii.) 482,400,000 242,400,000

6 iv. EV Multiple Conservative against Cheniere comp of 26x 16.00 16.00

7 v. EV (iv.) x (iii) 7,718,400,000 3,878,400,000

8 - Capital Costs - 3,400,000,000 2,200,000,000

9 vi. Project Debt Company projections 2,740,000,000 1,540,000,000

10 vii. LNG Ltd Project Debt (vi.) x (ii) 1,644,000,000 924,000,000

11 viii. Market Capt Project (v) - (vii) 6,074,400,000 2,954,400,000

12 ix. Shares Assume no further issuances 464,900,000 464,900,000

13 - Share Val (viii.) / (ix.) 13.1 6.4

14 Bear Head

15 - - Notes 2 MTPA 2 MTPA

16 i. EBITDA Extrapolated 202,000,000 202,000,000

17 ii. LNG Share Base case scenario 60% 60%

18 iii. LNG EBITDA 60% x (ii.) 121,200,000 121,200,000

19 iv. EV Multiple Conservative against Cheniere comp of 26x 16.00 16.00

20 v. EV (iv.) x (iii) 1,939,200,000 1,939,200,000

21 - Capital Costs - 1,100,000,000 1,100,000,000

22 vi. Project Debt Estimate 70% TPC 770,000,000 770,000,000

23 vii. LNG Ltd Project Debt (vi.) x (ii) 462,000,000 462,000,000

24 viii. Market Capt Project (v) - (vii) 1,477,200,000 1,477,200,000

25 ix. Shares Assume no further issuances 464,900,000 464,900,000

26 - Share Val (viii.) / (ix.) 3.2 3.2

Expand

Appreciate your numbers and calculations. Will have a look at it later on tonight and over the weekend and add any discussion. My big problem with estimates for Bear Head is it's hard to determine what the initial costing will be. For 2mtpa I'm guessing they only need half a tank. Given we don't have a breakdown on the costing of Magnolia it's unclear how much not building the second tank (and associated infrastructure) would save. My ultra conservative estimates put costing for 2 mtpa at Bear Head relatively high and thus quite a lot less profitable than Magnolia at 4mtpa or what Bear head would be if/when it reaches 4mtpa. This means that based on the information we have to go on, and wanting to be conservative, you can't really consider Bear Head to guarantee a significant contribution to the EBITA over and above Magnolia.

LNG Price at posting: $3.47 Sentiment: Buy Disclosure: Held

0 Great analysis

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