Can this ASX Micro Cap Reshape NSW Gas Supply with Looming Offshore Exploration Campaign? | The Next Small Cap
FINALISED: 02-05-16 PUBLISHED: 02-05-16
Can this ASX Micro Cap Reshape NSW Gas Supply with Looming Offshore Exploration Campaign?
Sydney may not be immediately aware, but the price of gas is about to start its upward journey.
The rise is occurring because LNG plants in Queensland are sucking up all the gas and selling it to Asia.
That wouldn’t be too much of a problem if the LNG operators weren’t dipping into the domestic market to find their gas.
In fact, it wouldn’t be too much of a problem if there was more gas to be extracted from NSW.
There is, but the gas isn’t making it out of the ground because the groundswell of local and political opposition to the coal seam resource has had its own ramifications.
So, what’s a state to do?
The company we’re focusing on today invests into exploration companies targeting potentially large energy and mineral resources and may have a solution to this current gas problem. This company, which recently opened and extended a Share Purchase Plan, has ambition to be one of the only gas players to look offshore NSW – where there’s no locking the gate.
Through an investee company, it has secured a vessel to start a seismic program to assist target drilling for natural gas in the hope of easing the looming gas burden. The target is adjacent to Australia’s most populous region and the petroleum licence has the potential to hold 944 million barrels of oil equivalent as Prospective Resources of Natural Gas.
It is a region State and Commonwealth governments are keen to develop in order to unlock industrial users who may need a reliable supply of gas.
Remember, however, that this is an early-stage company still in the seismic phase, so it does have a while to go before taking advantage of the ripe market conditions – seek professional advice when considering this stock for your portfolio.
The company also recently signed a Letter of Intent (LOI) for potential supply of gas, but where this play really grabs attention is in a now-defunct government scheme which makes earnings on this stock free from capital gains tax.
When this company was awarded Pooled Development Fund status by the Federal Government it meant most shareholders didn’t have to pay tax on capital gains and dividends.
How does that work? Read on to find out.
But before you do, consider this:
This stock, currently capped at just $6.5M, is hedging its bets on two very different sectors: energy, and biotech.
If its imminent seismic programme bears fruit, and the Australian biotech sector experiences the kind of surge in market interest that its US cousins have received in recent years, then this company’s investments could quickly gain market traction on the ASX.
The company has a stake in a currently unlisted biotechnology player, which is showing excellent results in developing a pre-clinical model that can influence the development of liver cancer. That particular company could be listed on the ASX – providing an immediate look through value on what this company is holding.
It’s also taken a position in a technology that could assist anaesthetists to ensure patients remain properly sedated…
We’ll get to that later, but for now…
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