It has to be proven to be commercial first, but if it is then....
Well, we have the Parmelia gas line kissing the tenement bounday to get it to the domestic market which has a forecast supply shortfall.
From memory it was paying $7.5-9.0 a gigajoule. Apache's Devils creek gas plant which came online 6 months or so ago is believed to be putting in at $10.40 per Gj.
Early success would mean a chance to tie up pipeline and GSA contracts before the pipeline runs out of capacity and/or the market gets flooded with a glut of cheap gas and the price gets depressed as it has in the US due all the shale players coming online.
So let's say if it flowed at 10 MMcf per day the that would come to 10546.15 Gj.
10546.15 Gj x $10 = $105,461 / day revenue $105,461 x 330 days uptime / year = $34.8 M $34.8 M x 28% (NWE share) = $9.7 M / year.
All figures ignore CAPEX and OPEX. CAPEX should not be massive as it's only a 12 km run to the main pipeline.
I'm not expecting condensate (but i'd be happy to be suprised!), so the gas will be fairly cheap and simple to process.
The HCSS was just foreplay. Congrats to P.M and crew.
GLTA...
NWE Price at posting:
9.6¢ Sentiment: Buy Disclosure: Held
