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Timbogold

1,049 Posts.

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04/12/14

14:33

Post #: 14408354
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Originally posted by DArabie ↑

Another very interested owner from Louisiana living just outside of Lake Charles. I actually operate quite a few businesses in the area and due to the rapid pace of expansion in the Chemical/Natural Gas business, Southwest Louisiana will never be the same. That said, I enjoy both sides of the position on LNG as much as anyone as Shorts always paint a picture that allows investors to get longer if they desire while for chartists, making plenty on the swings. Shorts on this from Aussie country though clearly do need to know that much like Cheniere in the early years, the shorting will come to an end and the price for the longterm is very much higher.

Sasol is bringing in more people daily and just recently began the early stages of hiring for 5000 new jobs in their 8 billion dollar expansion. Cheniere has led the revolution to the Natural Gas export industry here as well creating jobs and wealth for more people than I know at the moment.
I am very familiar with the planning and stages of LNG/Magnolia and I am in both camps at the moment on the situation.
Shorter term, oil prices will create stress on the entire industry within the Texas/Louisiana region. Lower oil is great for normal people buying gas for cars and cost of goods but it is not great for jobs and certain businesses in the oil and gas industry. This region is great because we are built perfectly for exporting LNG and Oil one day along with refined products and chemicals that are produced here because of all the cheap fuel we have here. Lower oil means less production next year and more capped wells waiting for higher prices. This also means a more limited supply of cheap LNG from the US to go elsewhere meaning some of the planned projects on the table may not get off the ground in the future at expected rates because new cash flow figures with $60/50 oil.

That said, LNG/Magnolia and Bear Head have already advanced to the stages of no turning back and have the advantage of being able to be early to the game. This lower oil price only hinders if we don't have guaranteed supply chains locked and contracts for exporting finalized. Once those are set, both projects have HUGE upside and should LNG.AU list in the US at any point, it would see $20 shortly unless a meltdown occurs in which no one is safe but those in cash. Add to that the likely decision of many projects being set aside until a return to normal oil prices, and clearly by the time LNG/Magnolia and/or Bear Head start exporting, stock prices could clearly be worth $30 to $40 as you also have to factor in their very close ties with Kinder Morgan/Rich Kinder for guidance and insight on creating value along with large Hedge Funds involved. Only issue is I wouldn't really be investing now in line for a bounce because of third project I am would be in the camp that with the change in oil/gas price, that project might be only investigated but not advanced until Magnolia is locked in and price in oil goes to a base of 70 to 80 again where so much more value is created.

I like many others don't like seeing gains come and go with the swinging in the stock price but the time for INVESTING in the company clearly is now by all the experts I know in the industry in this area that have seen and understand their tech along with their projects. Shorts may be right in the short term but I would be looking towards April for a double from here providing the markets are consistent and supportive.

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Thanks DArabie. Refreshing to be reminded of the macro view after the minute by minute preoccupations of others.

2015 is shaping up to be another stellar year given the advanced stages of MLNG & BH and as we all know much more modest capex associated with OSMR.

And from what I've read, sentiment in the O&G sector may turn positive sooner than expected esp if M&A activity ticks up (Halliburton/ Baker Hughes & Technip/CGG are but 2 recently ann. deals)

Already the sector is 3.3% up in the last couple of days after the initial sell down post OPEC.

Go LNG!

LNG Price at posting: $3.07 Sentiment: Buy Disclosure: Held
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0 Great analysis

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