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" for a successful final investment decision before the end of H1 2019"
Small point but previously mentioned June for FID, looks like could be slightly quicker
In addition to spuds response, the comment made by JW also further cements the points I’ve highlighted below. “Completing FEED successfully and receiving independent confirmation that the Project can be constructed within our financially modelled ranges is a credit to the entire team that has worked on the Project. We are now working on planning the next development stages of the project whilst ensuring all elements come together for a successful final investment decision before the end of H1 2019. I would like to thank Costain, Deep KBB, Atkins and WSP for the delivering the FEED study in the time available to realise the EU Grant."
Older, the initial comment highlights the expectant budget range. The IRR will also likely be irrelevant from any previous modelling given the project life is expected to increase to around 40 years. “The economic modelling undertaken was on a range of cost estimates of £100m - £120m for delivering Phase 1 (2 caverns) and £300m - £330m for Phase 2 (adding an additional 6 caverns, resulting in a total of 8 Caverns). The combined FEED studies have delivered P90 cost estimates of £114m for Phase 1 and £265m for Phase 2, with an additional risk allowance for a total of £11.6m for both phases.” Total for all 8 caverns is £379m as you alluded to, phase 1 for two caverns came in under budget at £114m and phase 2 similarly under budget. Their initial cost projections were in the range of £400-£450m.
I'm reassured by this line in the rns O&W
"The P90 estimate is consistent with the economic modelling undertaken on the Project and therefore InfraStrata proceeds into the next phase of development with a high level of confidence from a technical, cost and economic basis."
I'm surprised that there was no debate yesterday about the actual P90 cost estimate of £379mn for both Phases of the cavern construction.
This is quite a jump from the initial £308mn mentioned in the 2015 Baringa Model projections, on which a 12% IRR could be earned by Infa.
One of my questions to JW will be, is the 12% floor on the IRR deliverable at the higher capex estimate. Is the offtake partner onside with this new higher capex level and Infa's need to build in a sustainable IRR to manage the project?
I presume the third party has had sight of these costings via a NDA already, and that didn't prevent them signing a LOI, but it would be very reassuring to see the economics remaining attractive for Infa after this FEED disclosure.
Here here..good one !
At 4.25 it was the only time I could get a quote for 3mill shares the rest of the day the limit online with HL was 1.5mill. Mcap is so relevant, the bigger the mcap the more money you need to move the sp (generally)
Just a couple of contradictions. The bid was strongest all day just before the RNS.Where was the 10% gain today that those traders were selling into? The mcap is only the sp times the number of shares in issue so it isn't always relevant.
I agree there is lots more news to come but I am astonished that the SP has been suppressed by the MMs after a spate of good news. Go well, spud.
Spud,
Nicely summarised imo, and the point regarding traders is bang on!
I expect more newsflow together with some press coverage in the coming weeks and I believe this will rerate slowly towards 1p minimum, I would much prefer this than a sudden spike followed by the inevitable fall. The only danger lurking around the corner not just for Infa but markets in general is what outcome is forthcoming over the brexit malarchy!! markets may suffer some jitters if a deal is voted down as the UK will then be in unchartered waters!
Mr T
The SP maybe lower but the mcap isn't. FEED was expected to be successful. Bid was strongest all day just before close FWIW. Always traders going to sell on news for their 10%. Lots more news to come imo
Yes...easily explained....there is unsavoury investment orientated activity afoot that needs urgent high-level and widespread investigation. This is not unique, it is happening on virtually all AIM sites.
I’m confused is it more profitable for the MMs to play these games than just invest and make a huge profit
An RNS announces the completion of FEED and the construction estimate. Such good news that it triggered 17 trades and 14 of those were sells. And the 4 buyers were so excited that they bought less than 2million shares BETWEEN THEM. And the MMs played their their part by widening the spread at the end of the day to discourage any hopeful buyers. Can anyone explain all that? The SP is now lower than it was after the requisitioners took over in May 2017.
Snow,
Someone seems to be offloading here in chunks, also appears that the selling started post today's RNS?? very strange behaviour indeed. If someone is intent on offloading then there will be downward pressure on the sp until they cease or until more buyers come onboard. This appears to be a very good investment opportunity but then again AIM doesn't attract investors only day traders, punters and people looking for the next quick buck in a nano second.
Considering the superb newsflow of late I'm amazed that we are still below 1p!!! Expecting a serious rerate sooner rather than later here.
Mr T
Oh...come on....pull the other one it's got bells on!
Don't take us for mugs!
NOBODY is going to sell after that news!....not even if they are in straight jacket and have just been diagnosed S clinically insane!!
Bloody well stop mNipulipulating the market for nefarious reasons and behave yourselves!....Let her rip!!!
Wow!
Once again above expectations!....estimates for phase 1 spot on...estimates for phase 2 is stunning news...take yet another bow Woody and rest of board.....gentleme ......we are in safe hands!
Exactly, EyeGuy.
It's all about the funding in these long-life infrastructure projects, whether they are home-grown or in Africa or elsewhere. I trust in JW to be on top of these matters, and in a time-sensitive context.
Great news. Looking forward to the funding news now
Need to see their plans for future projects imo. But WELL north of here medium term
Indeed, and I wonder what kind of share price expectations people have for when the company is in full swing generating revenue!
Well done all involved, knowledgeable posters included! This may be AIM but new (high) standards are being set by this board IMO.
receiving independent confirmation that the Project can be constructed within our financially modelled ranges is a credit to the entire team that has worked on the Project.
These are the other words I have long waited to hear.
Fully agree. The long term view gets a bit frustrating when immediately after FEED completion and such positive news, the first transactions are sells driving the price down a bit - one wonders. Seems my brain might be wired differently.
Yep Brew, big derisker!!!
Whilst it will take InfraStrata some time to fully analyse the studies, it is clear that nothing material has been uncovered during either the surface FEED works carried out by Costain or the subsurface FEED works carried out by DEEP KBB that should physically prevent construction of the gas storage facility.
These are the words i have been waiting for.