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Olderandwiser - The SP is where it is because that is being on AIM which is a casino where short term trading is the norm supported by the MM's.However as INFA ticks off the boxes in the next few months successfully there will be a new base of say 0.70 etc.Long term INFA will succeed as it is too big & too important to fail.
OK, we've agreed that Rough is dead, no matter what.
We know that the npv of IslandMagee for a 20-year life is $100mn.
We know that UK energy security is going to be a hot topic.
We know that the UK has less than 6% of reserves of natural gas in relation to normal demand.
We know that the only proposed UGS project in the UK and Ireland, and with full planning permissions to proceed, within 3 years of final construction, is IslandMagee.
So, why is Infa still valued at a MC of £6mn??????
general stuff on salt cavern industry, was looking for a few construction manuals (got room at bottom of garden)
https://www.costain.com/media/13021/ugs-gpa-paper-nov-2008-1mb.pdf
http://www.pte.pl/pliki/2/1/art%204.pdf
encyclopedic geo, salt caverns - item 2.2.7 onwards, page 35 on my download, and elsewhere
https://infrastructure.planninginspectorate.gov.uk/wp-content/ipc/uploads/projects/EN030002/EN030002-000784-KGSL%20-%20HSE%20Research%20Document%20(RR605).pdf
Can't see it to be fair .... for starters Rough being a long range facility had very long injection and withdrawal rates making it uneconomic to operate from a business case view hence why Centrica took the decision not to spend what would have been over £1B in refurbishment costs of the wells and associated platforms etc to continue safe operations of what is an already ageing facility.
That cost is the equivalent of 3 Infa fafacilities with money left over. It has been established by several sources of research that medium range facilities that offer the ability to inject and withdraw gas quickly on demand, to respond to the demands from the grid quickly offering numerous cycles over the year are the future for gas storage in terms of not just the economics but their overall efficiency and deliverability.
So effectively for £300M - less than a third of the cost of refurbishing Rough the UK would have a brand new facility capable of supplying over 25% of the UK gas storage needs.
It may be small in size compared to Rough but will deliver in terms of deliverability the equivalent of half the size of Rough (1.5bcm) due to the many cycles it can perform over the year.
So the likely conclusion that will be drawn from the inquiry is that the decision to close the ageing depleted oil field Rough storage will stand and the proposed salt cavern gas storage project's in the UK will be recommended for development in the interests of energy security and security of supply.
The inquiry has been long coming only question is if the govt decide whether or not they believe the tax payers should contribute towards them.
My mind is positively swooning now, snowman100, after your link.
Seems an open and shut case there, spud. Thank you. Mind put at ease now.
O & W This is the best I can do to reassure you. The following is from the Competitions and Markets Authority......
Rough gas storage undertakings review Final decision
‘CSL considered that the only remedial measure which would mitigate all risks to an acceptable level was to drill new wells and rebuild the whole offshore facility. It told us this conclusion had been verified by the Centrica Group Wells Technical Authority. CSL had calculated the costs of rebuilding Rough to create a safe facility with broadly similar characteristics and had an independent expert (Genesis Oil and Gas Consultants Ltd) verify these costs. CSL told us it had determined that these works would cost in the order of £1 billion and would take around five years to complete.’
That, taken together that is not as flexible for fast supply as is Island Magee.........is enough to reassure me that Rough is no danger to our project........imo our project will materialise come whatever other developments also take place such as LNG at Shannon.
I hope this reassures you, it does me.
I have put 'strong buy' but if the option was there I would choose 'no brainer !'
Good Luck All!......We will excellent news before this year is out!
If I remember rightly, it would cost upwards of a billion to refurb it. That's why it was closed. Here, it's one fifth to a quarter of that with a 40 year lifespan. Correct me if I'm wrong
https://www.centrica.com/news/cessation-storage-operations-rough More flexible Medium Range Storage is the way forward IMO. Onshore, numerous cycles per year, cheaper OPEX and CAPEX
Can someone please reassure me that all this recent movement at the political levwel re gas storage, won't result in subsidies being pushed towards Centrica/Rough to reinstate it.
http://hvpmag.co.uk/news/fullstory.php/aid/5879/Government_sets_up_gas_storage_inquiry.html .........
"Energy security is underpinned by long life, capital intensive investments which require long term financial certainty; these are not characteristics found in our energy market today. We have seen that the government felt it necessary to intervene to help deliver positive changes to the electricity market, such intervention may now be necessary for the gas market if we are to provide the right level of gas security."
probably a good idea my bank cant afford it ;)
I think we should keep the excitement down a bit, especially for Humpalumps......... ;)))
Agree this kind of thing is once in a blue moon :} still gradually topping up :>
Spud....although 10p sounds good for short term.....that is still RIDICULOUSLY cheap for this share.....This is a once in a generation share....this WILL NOT be staying in AIM........imho it will move on up into the main market in the not very distant future!
In a few years time, the dividends alone will be awesome!
Sold!!!!!!!!!!!!!
Interesting topic--never really considered a take-over of the little ship at this stage of he voyage .Not really what the LTH's want as there is plenty of value to be had in next few years from now rather than now at early development stage.How many votes do we need to bat off any predator pirates..me and my mates can muster up quite a good crew ?
Would be interested to know the answer !!
I don’t think so Setanta, it would make no odds unless they wished to lodge a bid for INFA in its entirety. A take over of course is certainly not unlikely.
Could it be possible that " ..construction financing providers " who may be interested in taking a substantial project
level equity stake in the construction phase wish to see the SP restrained thus giving them more for their investment. That would imply that the" detailed discussions " referred to could be at an advanced stage. I hope so!
Excellent post. (as have the last few of yours been in relation to INFA). Why I can already feel my coffers swelling. If you'll pardon the expression.
Very true MrT - much can be said about many a government! Older, if the grant was forthcoming I would see a scenario whereby INFA could hold majority stake of the project. What will be interesting is if offtake negotiations are proposed in the near term which may shed light on how the later structure will look. There will be an equity component at project level as alluded to by previous RNS, statement below; “Detailed discussions continue with construction financing providers in respect of Project level finance. A number of providers have expressed a conditional interest in taking a substantial Project level equity stake in Islandmagee's construction financing, subject to completion of due diligence and terms being agreed.” The valuation ascribed will likely fund a large portion of the work and offer a significant uplift in NAV. This however is only for phase 1 and a deal may be structured as so ergo, phase 2 and phase 3 could potentially be self funded by INFA based on revenues and with substantial collateral behind them. Either way, it is all very exciting and at £6m there will be significant upside as pieces of the puzzle come together. As we know, FEED is almost complete.
The .5665 were sells
That was my point spud and Speedy. I just find it hard to see the rationale. One would imagine that the MMs could make a far better market for themselves if they let the SP follow its natural course.Nine trades today with about 3.5m shares traded,( and just 163k sells), is pitiful.It will all come good in time but I wonder why the MMs are putting the shackles on.
But what a good point at which to enter!
It was a false close last night with the .59 uncrossing trade
3m shares bought, SP down 4%..........go figure it out? This will all come good eventually and with a big bang.