Chat with Bahay 19 October 2022
Corporate
2 new directors, I asked what they brought to the table for Parkway.
They have lots of experience in large capex projects, they are well respected in the industry and have lots of connections.They also have experience funding new tech and getting it to market.
Cash
I asked about our cash position and Bahay said I would have to wait until next week, I’m guessing that’s the quarterly.
aMES
I asked if we were doing work with clients with aMES and the answer was an emphatic yes.As I suspected but is not that well known, there is an aMES element to the QGC work in CSG. I suspected that because during all my discussion with Bahay I learnt that there was a concentration phase that was required before aMES did it thing and no different here.
iBC Pilot Plant
I asked how the plant was performing and was it performing to expectations.The answer was the results are what we are expecting and that the process is allowing refinements and tweaks that improve the outcomes all the time.
QGC Feasibility Study
I understand that there are 5 stages, Stage 4 is submission and Stage 5 is completion.The study is on track and performing to expectations.Shell are talking to our team of Parkway and Worley on a fortnightly basis and there are discussions about what else could be done which is great.
I asked about the Term Sheet and most of it that can be known at this time is agreed, there are elements that can’t be agreed until the final outcomes of the Study are known so that is fair enough.
I asked what the chances were that Shell and QGC would green light the study into the plant build.Some interesting discussion here:
·No current viable cost effective alternative ( disposal and waste levies for the next 20-30 years).QGC are totally committed to the PWN solution because it resolves two of their major concerns and costs.Not only that but it produces a positive NPV where every other alternative has a negative NPV. Also there are compelling legislative or corporate drivers that lead to a PWN solution for QGC and industry. Used a slide of the CP to show me what this meant, you’ll know the one we mean where left hand side is current NPV and right hand side is PWN solution and positive NPV.
·Delivery methodology and commercial model drives value for PWN shareholders, pick the optimal solution for value creation.
·Once proven and implemented, it becomes the industry standard and that means all Qld CSG projects will be implementing this solution. They are thinking about how to add additional feedstock a plant to accommodate other projects.Something for the future but possibly my thinking that it could be added to this solution now.We have a solution for the industry that doesn’t last one year, but it’s a multi decade solution and that means a lot of value for PWN and Shareholders and the share price.
·You have to think that there have to be applications for iBC and aMES for Shell elsewhere, CSG in Qld are not their only producing assets that have brines and I would love to see Parkway and Shell explore their global opportunities to solve complex industrial waste or brine challenges. I can really see this project spring boarding PWN onto a global stage and further strengthening of the relationship with Shell globally.We’ll have to see the results of the QGC FS and what comes from that.But this FS is a huge stepping-stone for PWN. It will open up so many more opportunities, we'll be busy for ever.
·QGC did make mention that they were impressed with our new directors and that they were known.They didn’t have to do that, shows that they are noticing how PWN is building credibility, ( Worley, Directors, technical capability, technical solutions with global applications for many industries ( O&G, CSG, Desal, industrial waste water etc)).
·I asked what PWN meant when they said they were exploring all commercial avenues for maximising returns to PWN shareholders
oThe answer was the best outcome for PWN shareholders drives PWN’s model for commercial delivery of the project, whether that be annuity, tolling, or some other commercial model with the clients.
Middle East EPC
Still waiting on decision but needless to say that MOU in the region is excellent and there are outstanding opportunities for both PWN, their partner, their global Engineering partner Worley, such a big market and so many opportunities and there are hundreds of desal plants in the middle east.
KLPP
Not a priority at this stage but still there an opportunity for value add to PWN.
IP Breach – pretty much has gone away but monitoring the situation.Made our point.
Corporate Presentation and Multi-Nationals
Yes we are working with lots of them currently, they are current clients and we are doing all sorts of work for them, some technically funky, others traditional work.Both in the conventional water treatment space and our new tech.They have complex problems and we have solutions to those complex challenges.Can name drop some, but others prefer to leave their relationship private. Fair enough.
US Industrial opportunities
Still bubbling away, they are helping their clients.We need to pick projects that have large value creation opportunities for Parkway and we have to pick and choose what we are going to work on right now but these are still being worked.
Catalysts for Options
He couldn’t discuss this, was inappropriate so we left it alone.
We spoke about what after the Feasibility Study is complete and there are a number of things that will add value to Parkway:
·Shell/QGC pushing the button on the build
·Opportunities to take the tech elsewhere for our global partners
·Research house can prepare a research report on PWN once Shell says build the plant because we should know the potential revenues and then other opportunities in the region and then globally for the technology.I can see this being a massive value driver because investors/Funds/others will see that a revenue stream like an annuity will create immediate shareholder value and valuations.I can see 10 cents plus from this one solution with QGC but I might be being conservative
·Working on solutions with partners that involve different delivery models ( toll treatment, annuity, other ).
I know this has been a slow burn and is painful in light of where the share price was, but the crazy thing is that PWN has achieved so much since Feb 21 when the share price hit 3.1 cents, we are a much better company, have so much more capability, are working with hundreds of clients, some of which are the biggest names in the world, we are preparing an FS and working on studies with others, it really is worlds apart but the market is simply not recognising it.Good news is being met with disdain and I can see PWN sling shotting higher when the penny drops.I the mean time, Parkway continues to execute on its strategy and delivering for its clients, can’t ask Bahay to do more than that. We managed to use the whole hour and some so it was a great chat.
I’m very excited, I think the next 6 months will be absolutely game changing.
All my analysis and opinion of course, please DYOR.
Mr M.
(20min delay)