Member Info for Nobby31

This is not the gas price it is the value to an investor had they owned the storage over the past 10 years. In other words it reflects the intrinsic and extrinsic value from use of the store based on a determination of how the space, including the injection and withdrawal rights would have made money for the capacity owner. This is to do with volatility and not strongly correlated with NBP prices. I hope that makes sense so no need to get worried about gas prices. The reason Vitol like this project is projected volatility NOT any forecast of outturn natural gas prices.

I confess to being surprised this news hasn’t lifted the price somewhat. However there is still execution risk and a long period before the first caverns are in operation. What will certainly lift the price will be the news of equity participation which I feel almost certainly will be Vitol to give them control over the ongoing development and financing of the project to secure their offtake agreement. It’s a big positive step but further news throughout 2019 in advance of FID will enable the LTHs to really see some enhancement to the SP.

The BOD really do need to post an update now on the status of negotiations.
Their earlier frequency of RNS means not unreasonably investors expect to be informed and I am now of the view that we are not.
The principles of an offtake agreement are well established irrespective of cavern numbers. It’s about duration and the SBU price once injection and withdrawal capacities are set. I’m increasingly disappointed by the indications that a deal is soon to be struck which was first posited late 2018 on the lesser number of caverns.
I have been patient but cannot be for too much longer !

Please sense check your posts before you send them. That way we won’t have to read incoherent drivel. If you have a valid point to make then by all means post it as I think most folks on this BB are ready to learn more. Thank you kindly

Do you know that a single trawler in a single day can create a deadzone many times greater than the impact of brine discharge from this project.
Folks need to get some perspective on this aspect of the project; scientific and social. The impact is extremely low.

I’d think about selling some upwards of 3p maybe to get the original investment back with a smallish profit but I think there is every reason to see the SP considerably higher for those prepared to be patient !

Please ignore last line of my post!

If it makes 2p+ just on this news then I believe the project value for 7+ caverns over 15 yrs is going to make INFA a £75 million + cap company so it’s very exciting

The July NBP price is 31.0ppth today
Winter 19/20 is 54.2ppth
This is hugely attractive and in part explains why Stublach got their auctions away successfully.
These spreads if only they prevailed are enough to support the large high Capex seasonal storage developments but they won’t get built as too much uncertainty going forward.
Ok back to the project - let’s run a sweep for the bulls and bears on what the SP tops out at on the offtake RNS within a 48 hr trading period (enough time for most to players to find out and act).
My guesstimate is 1.5p
I’ll shall get us

As I’ve said on Twitter the offtake is really the main show. I appreciate it doesn’t mean your funded but it does hugely underpin the economic viability of the project as the terms and conditions of such an agreement provide for the payment (tariff) for the storage bundled units = cavern space. As such this means any equity participant or debt funding facility has line of sight to the revenue stream reducing one major uncertainty to the project and leaving the prime outstanding issues being capex and opex. The fact the single investor is taking all 7 (seven) caverns means scale (and therefore revenues) will be considerably larger than the smaller project. It’s very good news it just means that provided it gets announced soon we are waiting on the administrative aspects of the marine licence which I cannot see will hold up this process and the debt/equity structure. I hope and expect that if the off taker is also providing debt these two areas are decoupled such that BOD can easily find alternatives to this element to ensure a competitive outcome for shareholders. I’m now going away to hide in a cave .... or cavern somewhere. I hope I don’t find any of those ignoramuses that inhabit this bulletin board inside!

I am confused by the prior statement that there would not be any new information released at these two events yet clearly of what I am reading below and on Twitter is accurate then this is new information and material to investors as well?

I should like to meet some of you guys when the time is right and happy to buy bubbles

I wouldn’t know how to do that chukkers.
Are you saying they are day traders who are enjoying the volatility surrounding INFA in recent times?

So the rise yesterday was those inside who knew about the Costain FEED RNS coming out today then?
Those that didn’t know popped it up to 1.10 and here it sits now back by yesterday’s close!
Who are all these sellers when there is the potential for such good news on the horizon?
Even if the BOD fail to get equity & capacity deals locked away I suspect there are now enough big players who can put £25-35 million (2-3p?) to buy the Project and take the company off AIM.

So much speculation and we are probably all wrong!
My own view for what it is worth is that if the current climate does not result in a conclusive package of capacity and equity deals for the project I think the company would be an attractive hold for the bigger players in the industry.
Yes it has been a long time on the blocks and it is now in the best ever position for a commercial development; having said that if JW and his team cannot make it work then the cost of holding an asset like this on the books of a much bigger company like Gazprom, INEOS, Shell etc is minimal given the option value from a future development.
So my thinking is that a company sales could result in the event the commercial solutions are not found by this summer. The question then would be at what price could someone pick up INFA stock.

If the outstanding warrants number just under 100 million this is around 7.5% further dilution which would, if everything was pro rata take the share price down from the current 1.15 bid to around 1.07.
In the context of the significant prospect of near term news surrounding the development , sale of capacity, new equity participants along with the engineering milestones I’m not sure that these warrants are holding the share price back?
Delays to these decisions or unsuccessful outcomes from the current negotiations would therefore be the main risk. Irrespective of whether Brexit does or does not affect the Project it likely does impact the wider business interests of potential investors and so we may have to wait a little longer to find out. I hope I’m wrong but we are having to be very patient on this one. GLA

Looking at the recent trades would it be fair to state that on balance there are lots of small sellers and a few larger buyers which implies a consolidation i.e. a smaller number of larger shareholders?
If this is the case does anyone have any thoughts as to how this may impact the SP once the news starts to come in?

INFA are not the only guys peddling their SBUs out there. It’s competitive between at least two other projects and some may be comparing and contrasting who they invest with either on an equity or capacity basis or both. I would expect that as there is no apparent exclusivity partner that there is some kind of tender process with a deadline of sorts but this isn’t clear. An RNS at least providing a description of the process(es) would be helpful as for all we know this could have ground to a halt which we hope isn’t the case. I think if INFA BOD haven’t updated the market by month end and certainly end Q1 then investor patience may start to wear a little thin.

One of the difficulties faced by investors in gas storage facilities in the U.K. is the current approach to business rates. There is a lobbying effort to seek to reduce them as they equate to more than all of the other operating costs to run these facilities and are therefore a significant consideration on the economics.
I’d say the other big bone of contention lies with the charging methodology applied by National Grid, particularly on Exit i.e. on withdrawals from store. No recognition is given to the value that embedded storage has upon the operational costs (read compressor fuel) and reinforcement mitigations of a gas store and supply source within the network and usually close to points of high demand and at key nodes.
Both of these moronic constructions which are linked to appallingly thought through Energy Policy have to change to encourage more storage to be built so both developers and traders can invest with confidence and ensure greater price stability for the general public. (Note the recent lifting of the so called price cap imposed by Ofgem last week putting about £10 per month on folks domestic bills).
There’s common sense ..... and there’s uk government (yes Europe too but they are generally more visionary on storage matters)
GLA

Yeah couldn’t load it but then I’m not exactly enthralled with it as it doesn’t accurately report very much at all.

I think comes chiefly from Halite & Keuper but this is the only one that can integrate NI & GB gas trade and it can expand with further caverns to incoroporate ROI which is a bigger prize