Member Info for ps200306

EU has moved to ban tanker imports of Russian oil. Brent is at $123/bbl. Petrol is already €2/litre even with the government subsidy. What's the bets Sleepy will point to the just announced planning permission for Arklow bank wind farm as if it was relevant?

SoundasaPound1, I've never thought the pipeline wouldn't get funded... or that it would. I've no crystal ball and no more way of knowing than the next guy. All I know is that the longer it takes the more costly to SOU's shareholders as debts become due and have to be refinanced. Hopefully Phase 1 will stop most of that rot although I think LNG revenue is going to start just a bit too late to meet all SOU's commitments.

If I was a shareholder (and I *am* but have written off so much of my stake that my interest has waned a bit) I'd be keeping an eagle eye on whatever Phase 2 financing arrangements materialise. As with Phase 1, SOU isn't in a great bargaining position for finance. Phase 1 didn't turn out too horrible, but the cost per liquefied mmcf is higher than the industry average from my rough calculation. If you take the AG loan and its 6% coupon, plus the lump payment due to ItalFluid on completion and the ongoing lease cost, I reckon the costs are about 50% higher than if SOU could have afforded the plant themselves, perhaps $3 per mmcf instead of $2 (note: total back of an envelope calculation).

If this sounds nitpicky ... well there's a lot of nitpicky things over the past three years that have added up to a LOT of shareholder dilution. The mode of Phase 2 financing will be crucial. SOU is not in such imminent danger of going to the wall now that Phase 1 is in the bag, so not so much over a barrel, but it's still trying to raise many times its market cap for Phase 2. How much equity will they have to give away? If there is vendor financing, how much will the transit costs for the gas be? GL mentioned mezzanine financing previously. Apart from the cost, that also entails convertibility to equity in the case of anything going wrong, ahead of any shareholder claims.

All things considered GL has done a pretty good job so far but with a lot of dilution, and there may be more of that on the cards. Unfortunately, SP Angel haven't really given details of what they factored into their target SP for Phase 2. Also, if the timeline turns out similar to Phase 1, you are looking at first pipeline revenue in (late?) 2026 and not 2025. But like I said ... no crystal ball.

But Sleepy told us we weren't using Russian gas, so we're ok. Obviously when the UK is suffering blackouts they'll still be exporting our full quota of gas to us. Sounds reasonable.

Also in Sunday BP...

Government ‘deluded’ about 80% renewable energy by 2030: John Reilly, head of power generation at Bord na Móna, says there are too many bottlenecks in the system for the state’s targets to be met.

Utility, I don't believe the pipeline will be up and running withing two years. Financing and FID would have to be happening NOW. I'd say 2026 is more likely at best. That's not necessarily a calamity for eventual revenue. European gas prices had shot up long before the Russian invasion of Ukraine. Sanction on Russian gas imports may well last long after the end of that conflict. Supplies of LNG to Europe from the US will ramp up, but slowly. US gas producers got stung the last time prices collapsed. This time round they are more concerned with paying down debt than rapidly expanding supply.

I don't think any of this matters much anyway. Half of the Tendara capacity -- 30 of the projected 60 mmscf/day -- will be at a price agreed with ONEE two years ago. There is plenty of profit at that level, without the windfall of current high prices. Anything additional would be icing on the cake. If there are headwinds it might be because of a global economic recession caused by commodity shortages. Gas will still be in demand.

SOU's problems are much more short term -- where is the financing coming from, and on what terms?

"I think the most important issues to be clarified next Monday are related to how are they going to fund ... " phase 2, drilling, seismic, etc."

That's not going to happen at the Q&A. If they knew the answer there would be an RNS. Every Q&A is preceded by people hoping to hear commercially sensitive information. It never happens, because it *can't*. They will tell you what they've already told you ... there are various possibilities and they are speaking to interested parties.

The problem is that Sleepy's magic wand is actually a cudgel with which he's trying to bludgeon the economy out of existence:

STATE TO SET 2030 CARBON TARGETS TO THE HIGHEST LEVELS FOR EVERY SECTOR

Each sector of the economy will have to hit the highest level of proposed government carbon reduction targets under new plans being finalised for cabinet approval this summer, the Business Post revealed.

The move means every sector will be legally required to achieve the maximum proposed cut in carbon emissions from their 2018 levels and will mean enormous structural changes for the Irish economy.

Last year, as part of the new Climate Action Plan, the government published a series of proposed sectoral carbon budgets, which set out a target range each sector would be asked to cut emissions by and would have to achieve by 2030.

They included a 62 to 81 per cent emissions reduction for the energy sector, a 37-58 per cent cut in land use emissions, a 44-56 per cent cut in residential emissions, a 42-50 per cent reduction in transport, a 29-41 per cent reduction for industry, and a 22-30 per cent cut in agricultural emissions.

The ranges have now been narrowed down to specific sectoral ceilings and the government is set to assign each sector a target at the higher end of these ranges. This was always a likely scenario given that the lower end of those target ranges would deliver a mere 37 per cent cut in emissions, which is well short of the government’s stated aim to achieve a 51 per cent drop by 2030.

Due to the legally binding nature of the new Climate Action Plan, it is understood the sectoral emissions ceilings currently being finalised by government will all be set at the upper end of the indicative ranges.

Eamon Ryan, the Minister for Environment, has communicated this reality to the relevant ministers in recent weeks backed up by a fresh research paper from McKinsey consultants, which has plotted potential pathways to divvying up the emissions between sectors.

... cont'd

And let's talk about Sleepy's hydrogen idea. The sheer hypocrisy of him talking about SMR nukes being "on the design board" and years away is nauseating when he talks about hydrogen. Gas turbines to burn hydrogen DO NOT EXIST. They are "on the design board". The best that has been done is a small percentage mixed with natural gas. Hydrogen burns much hotter and has flashback problems due to a faster flame front. One European utility thinks it can deploy a 100% hydrogen turbine before 2030 with the help of Mitsubishi Electric, but the city of Los Angeles thinks theirs will be 2045.

The infrastructure for transporting, handling, and storing hydrogen doesn't exist either. That will require major new expense, on top of the all the brand new grid infrastructure needed for wind.

But let's talk about the efficiencies of burning green hydrogen for energy. State of the art PEM electrolysis is 80% efficient, hydrogen combustion about 60% efficient. That means that storage of electricity from wind via green hydrogen will be less than 50% efficient and that's not including compression losses for gas that has to be transported and stored. Combined cycle gas turbines running on NG, on the other hand, are 64% efficient. Ireland's current NG usage is more than 3 million tonnes of oil equivalent, or about 35,000 GWh. We'll need about 47,000 GWh from wind power to do the same work. Running at a generous 30% capacity factor, that's 18 GW of wind turbines needed just to replace our current gas usage.

But don't forget, we need to replace our coal and distillate oil powered plants as well. We could be looking at 30 GW of wind ON TOP OF the wind power we're already generating. But wait ... that's only to supply current demand. Not only is demand increasing, but Sleepy want's to electrify a million cars in the next 8 years, shifting all of that oil usage to electricity. Oil for transport is current the largest share of primary energy use in Ireland.

Sleepy's aim was to have 30 GW of wind capacity sometime between 2030 and 2040. Even if it was achieved it wouldn't meet our energy needs. And there isn't a snowball's chance in hell of it being achieved anyway given the planning chaos, the unavailability of grid connections, and the general glacial pace of Irish infrastructure projects. And the costs of all of it were eye-watering even BEFORE he started wittering about hydrogen, which will add vast extra costs just to produce the same energy.

The guy is a swivel-eyed lunatic. Somebody needs to demand to see the costed plans for all this, and a sober assessment of its feasibility. At the very best it is crazy expensive and decades away. I presume he realises we are busting our gut to import emergency generators to meet demand NEXT YEAR! This cr@p really makes my blood boil !!!

The guy is a scary zealot. He is talking straight out of his backside and none of that sleepy handful of senators has the knowledge to call him out on it. He lies through his teeth about all the options he doesn't like and hypes the ones he does.

Just some of the untruths he is spewing:
1) "Small modular nukes are decades away" -- Romania has just signed contracts for NuScale SMRs with the blessing of the US Department of Energy, with the first reactor to be built by 2028;
2) "No Irish offshore gas has been found outside of Kinsale and Corrib" -- sites adjacent to Kinsale and Corrib could easily hold the equivalent of another Corrib;
3) "No commercial quantities of oil have been found" -- Barryroe has flowed commercial quantities from multiple wells;
4) "... even though we've spent hundreds of millions" -- the government and the taxpayer do not pay for oil exploration, it is entirely at the risk of the exploration companies. What's more, those companies are trying to exploit existing licences that Ryan is stalling. The criteria set out in law for the issuing of permits don't include the minister acting on his own whims.
5) "Our gas supply from Norway via the UK is secure" -- utter bull. The UK is already importing a substantial amount of its gas needs as LNG, and by 2030 that will go from 25% to 75%. Why the hell would they export that to Ireland? We have no long term contracts for our gas supply, and no gas storage in the event of a supply disruption. Our own import needs will grow to 100% by 2030.
6) "The aluminium smelters in Shannon want to use hydrogen" -- what a technical genius! There is no aluminium smelting in Ireland. Aughinish refines bauxite to alumina which is then exported to countries with cheaper electricity for smelting. I'm sure they'd like to reduce their emissions as it costs them money but right now they have bigger problems -- due to being owned by the Russkis they are suspended from the European Emissions Trading System.
7) "Whitegate power plant wants to use hydrogen" -- has anyone discussed the cost of it yet?
8) "The future grid will use batteries for storage" -- this is pure hopium from Ryan, and one that he trots out regularly; there is absolutely zero prospect of truly grid scale battery storage, now or ever.

cont'd ...

Fascinating insight into the paradoxes and contradictions at the heart of investor ESG criteria...

https://rogerpielkejr.substack.com/p/why-investors-need-not-worry-about

... and the outrageous presentation that dared to point them out (before they shot the messenger):

https://www.youtube.com/watch?v=bfNamRmje-s

Meehole Martin has clearly been imbibing the Kool-Aid. He is fiddling to the scent of Rome burning. While he rabbits on about "the focus being on renewables", here's the facts on the ground from today's Biz Post:

"Government scrambles to avoid further price hikes amid emergency power supply plans.
The state will have to double the importation of planned emergency power generators in 2023 to prevent blackouts, but is looking for alternative ways to pay for it rather than passing on costs to homes and businesses."

These idiots are literally looking on while the lights go out. The planning and permitting process for wind is the same chaotic disaster as it is for offshore oil and gas. However, wind will *never* be able to deliver reliable baseload power. The Taoiseach doesn't seem to get that even if Ireland is an exporter of wind energy by the mid 2030s, we will *still* not have reliability of supply. He also seems to be suffering from the delusion that Ireland's saving of 0.05% of global emissions is going to avert the scary future he has convinced himself of. The prospect of an energy drought is much scarier and much more imminent.

But we are where we are. We have one Taoiseach with no grip on energy realities, and in December we will trade him for another. In 2025 or earlier, we will likely get yet another. By that time, Dáil sessions may have to be held by candlelight unless they've rigged up a bulb to the dynamo on Eamon Ryan's bike. Don't expect Sleepy to pedal it though ... he'll either be having a snooze or be off "peddling" his crock of green sheeite in Strasbourg.

"When this finally breaks 3p, it just can't seem to break and hold above that mark."

Bazillions of shares have traded at low values in the past two years. While 3p is a long way short of breakeven for many, it is 100+% profit for others. That selling pressure is likely to constrain the rate of SP increases. Given the history, a lot of people will take the money and run. Definitive Phase 2 news is needed for further rises and that will likely be quite a while, IMO.

"More than half Ireland’s electricity was generated from natural gas in April, while wind generation accounted to around one-third, according to figures provided by Gas Networks Ireland. Gas generated 52 per cent of Ireland’s electricity last month, up from 41 per cent in March, arising from a “fall off in wind” which gas compensated for, according to the utility body." -- Biz Post

Lowest ever closing price was 1.1p on 19/03/2020. Price only ever under 1.5p for seven trading days around that time, and under 2p for a further 15 days up to early April 2020. Fair play to you if you bought all your shares at that time, but you've been posting as Manyana since August 2018 when the SP was 11p, and as Sobeit for a long time before that. An average of "around 1p" sounds pretty impressive and/or impossible unless you have a truly vast number.

More than happy to have averaged down there, a process you know all about.

Actually, beginning to feel a bit sorry for some of the crypto nuts. Have a look at the reddit for the Luna coin. Genuinely suicidal stories, and helpline numbers are provided.

https://www.reddit.com/r/terraluna/

Luna fell 95% in 5 days .... and then *another* 99% in one day! Down more than 99.99% from all time high a month ago. It has triggered a panic across crypto markets whose combined value has fallen by well over *two trillion dollars* since November, 35% of that in the last week alone. Nearly $200 billion has been destroyed every day this week! Schadenfreude seems inappropriate ... lotta people gonna be hurting.

STD123: "anyone losing £600,000 on this share is in no position to lecture anyone."

Go on, then. Tell is about all the moolah you made when the share price hit 6-10p in June 2021 just like you predicted. LOL. Unlike you I haven't been ramping this share for two years while losing money.

Utilityone1's sole point was that if the tax bill is *not* spurious then it will have to be paid and *ought* to be paid. Ktf and STD123 turned that into a moralistic lecture on letting Moroccans eat cake. Pair of toerags.

Had to laugh, thinking of our dearly departed resident troll TheShen / GuntherGobdaw. According to him and the "savvy investors" at the Miami Bitcoin conference just a month ago, renewable energy would be springboarded by crypto mining operations. I warned him that when the dam broke on overvalued tech stocks, that crypto would get slaughtered too.

Well ... Bitcoin is down 35% since the conference (just five weeks ago, remember), and 58% since its high in November. Dogecoin is down 44% since the conference and 88% since Elon Musk hyped it on Saturday Night Live a year ago. The share price of Coinbase, the online crypto platform, is down 68% since the conference, and 85% from its high last November.

Cathie Wood, CEO of Ark Invest, spoke at the Bitcoin conference and predicted that BTC was going to $1m by 2030. LOL. She just bought half a million Coinbase shares on the dip. We'll see how that works out. By the way, her ARK fund which invests in tech stocks is down 78% from its high. I believe this is what she refers to this as "taking advantage of volatility during corrections".

One thing Gunther picked right -- the right time to take a hike! ;-)

Utility, I wouldn't waste too much breath on that pair. Both clearly have a "let them eat cake" attitude to Moroccans. By the way, you are correct about STD123's predictions despite his protestations. But then, his most recent post has so many failures of logic in a single post that one shouldn't really expect much in the way of either truth or reason.