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4.3¢ liquefied natural gas limited

Thanks for posting, interesting read

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panorama

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17/06/18

16:51

Post #: 33765751
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Originally posted by mmartin ↑

Spot on Tysons.

Nice summary from Foster’s

www.fostock.com.au/LiteratureRetrieve.aspx?ID=241454

Foster Stockbroking. June 2018

Investment Highlights:

A$28.2M share placement: LNG has announced it has entered into a binding agreement with IDG Energy Investment Group Ltd (650.HK) for a share placement of 56.4M LNG shares at A$0.50/share. The placement price is at a 14.1% premium to the 30 day VWAP of A$0.44 for the period ended 1 June.

Following share placement close, IDG Energy Investment will hold a 9.9% interest in LNG. Settlement is expected to be completed on or before 15 June 2018, and issued shares will be voluntarily escrowed for 180 days after closing. The company notes there are no outstanding conditions precedent for close.

Shores up LNG balance sheet: we estimate the company will have more than A$50M cash at placement close, with share placement gross proceeds of A$28.2M, before costs. At current cash burn rate (A$5.7M in FY18Q3a), the placement proceeds ensure the company’s runway well into CY2020. The company will use net proceeds for continuing Magnolia LNG offtake marketing efforts and general corporate purposes.

Strategic partner with Asian networks: IDG Energy Investment is a Hong Kong listed investment holding company focused on global energy assets investment and management. It has a wide-ranging portfolio along the LNG value chain, including investments in China’s first non-state-owned LNG receiving terminal at Guandong and a significant Canadian LNG export terminal under development. Other energy assets include an upstream crude oil block in China, and an Eagle Ford shale block. IDG Energy Investment is affiliated with IDG Capital which has US$20B assets under management.

Leveraging IDG network to translate into Magnolia offtake momentum: we hold the view there is potential for the company to leverage its strategic partnership with IDG to its established networks to facilitate Magnolia LNG offtake agreements. Additional opportunities to market LNG volumes exist given IDG Energy Investment’s portfolio of infrastructure investments, including regasification interests.

Targeting FID by CY18e end: we continue to hold the view future updates on Magnolia offtake will signal FID. The company has expectations for FID near CY18e end, and this placement signals strong interest from a large, strategic, connected partner. LNG continues detailed negotiations with a range of new, emerging, and traditional buyers across Europe and Asia; we are hopeful that the IDG placement brings additional credibility weight as well as introduction access to established Asian networks to lock down offtake.

Earnings, Valuation and Recommendation:

We have an unchanged recommendation of Speculative Buy for LNG. LNG’s Magnolia is shovel ready, fully permitted, and has a guaranteed production EPC contract in place, as it works towards securing offtake agreements for the proposed Magnolia project ahead of an investment decision.

Key catalysts for the stock include: continued recovery in global demand to catch up to LNG supply; securing contracts totalling 6Mtpa output (75% of 8Mtpa nameplate); final investment decision; construction.

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Thanks for posting, interesting read
LNG Price at posting: 52.0¢ Sentiment: Buy Disclosure: Held
1 Upvote

0 Great analysis

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