SCE valuation looks nice; certainly lots of upside. Good luck to all those long on MEE.
The high valuations (>$15/share) are very high though. I don't believe in applying the CSG multiples to MEE resource, simply because the CSG multiples are derived from getting a pure natural gas from the coals seam which can be liquified to make LNG. UCG produces a syngas which can't be liquified directly and hence isn't interchangeable with a CSG derived gas. It must be cleaned at the production souce and further converted into a tradeable product, such as power, chemicals of fuels. Thus applying this CSG multiple to the MEE resource is in my view incorrect.
But the valuations with the other UCG players and using a 1000ktd ammonia plant show sp values in range 2 - 3 $/ps which is still lots and lots of upside for us. Keep accummulating to enjoy the returns!
MEE Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
