I'm curious on what the directors plan to do, my presumption is...

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Surandy70

10,851 Posts.

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19/08/21

20:53

Post #: 55427359
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Originally posted by Tipton: ↑

I think that by far the most significant statement in todays update is :"KDP is taking steps to secure ownership of low cost gas reserves for its portfolio of power projects"
Securing these would be a massive game changer and dramatically change projected cash flows.
In the past we have been looking at a licensing and engineering fees and a margin to be shared with Akira.
Consider the following: KPO owns the gas and processes it into electricity .The cost of doing that would not be much more than 1.5 cents a KWH .According to todays update the power price has now increased to $125 MWH.
So the revenue we are looking at from 64 MWH would be 24x365x64 x125=$69 million .Give it 90 per cent availability and you get $62 million.
I doubt if the cost of getting the gas into the plant and burning it to produce power would be more than 15 per cent so we are looking at a $52 million margin.
Hopefully some analyst can do the same numbers .
Happy to be corrected?

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I'm curious on what the directors plan to do, my presumption is that any gas assets would be rolled into another company.

The wholesale electricity price jumps around quite significantly. I've been watching it nearly daily for about a week, the highest it hit was over CAD$600/MW but that was on a day of high energy demand with a number of outages, planned and unplanned. Mostly it's within the CAD$50 - $100/MW range.

KPO Price at posting: 3.2¢ Sentiment: None Disclosure: Held
5 Upvote

0 Great analysis

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