Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
To be fair they have largely done what they have said they are doing with GTW, which none of us knew anything about only 4 and a half months ago. And at the time they announced it they had a handful of projects under review, since then with Siemens addition, i believe they have had a lot of interest from operators.
The SPV is a project finance facility for multiple projects, its not project specific. Next time they wont have to go through this step, its straight to finance, offer and deal.
BTW i stumbled across an as yet unreleased part of MFDevCo website which has since been taken down after being tested last week.... it looks like they are preparing some kind of marketing launch with news....
Cobra.... do you know anything about the brazil deal or how it will be structured?
That's the difference.
We know that with GTW it will be funded via an SPV finance facility, with us owning 30% equity marnavi holding 70% with the option of selling this down. We know we will be remunerated via an upfront payment, a service contract and residual in the SPV. We know that multiple sources of finance are being perused and we know that successful completion of the SPV will lead to seed finance, project finance and progress to complete negotiations for 2 priority targets.
notsure.... yes maybe years of waiting but never such clear indications that a project will close.
Don't worry about the sp, its coming it wont be down here for long. Big money to be made if you can buy IMHO. The deal will be BIG news. 10 bags can be achieved in no time
Extract from MFDevCo website on GTW benefits:
BENEFITS
Urgent demand from operators and government
Low or no cost access to proven resources and infrastructure
First mover advantage with industry-leading partners and use of proven technology
Accelerated access to revenue
Transfer price volatility (exposure from oil to power markets)
Project returns outperform alternative use of funds
Financial model which is attractive to investors and minimises dilution to company
Aligned with global energy initiatives and government and regulatory objectives
Delivers value for all stakeholders – company, partners, governments, consumers
Worth keeping an eye on what's going on with oil at the moment. Lots of talk about over supply and oil price dropping into $40 range. Firstly it shows the challenges out there particularly when you come to talk about marginality and progressing new projects.
What impact for Dommo? Well the reduced oil price and risk of this dropping further would put a big squeeze on cash flow. Currently they have no improvement in ther production rates, and the security of the company is dependent on improving and sustaining production on this asset. For the bondholders.... well the risk for the bondholders of being equity owners increases greatly, with the charter becoming less valuable. You have to think that dommo could be in trouble again if oil drops down as low as some are predicting. The question is, does this make a deal for someone else easier, or does it make it unattractive to others?
What does it do for anything going on with Newfoundland?
But, GTW is a very good hedge against this. Of course there is volatility in electricity prices too, but the economics of supply and demand look much more favourable than oil at the moment. So perhaps MFDevCo have got it spot on in prioritising their GTW initiatives. There is investment out there at the moment in energy, but commodity prices represent risk. I can't help thinking that for finance providers the low opex and low capex GTW model with electricity as an output, would represent a very acceptable risk model for lenders at the moment. Especially with government backing and availability of cheap, decommissioning assets.
I wouldn't worry too much about Newfoundland at the moment. It could be a sleeping giant or it could never go anywhere, it doesn't matter short term we have other news.
GTW is far more pressing. 2 priority targets, how many others within reach? What about this field operator they mentioned in the rns? Who's financing the projects? Where is the seed capital coming from? How much will the upfront payment be, and when do we expect to receive it? What is the service contract worth?
Other things are also going on in the background.
What has Ivo been up to? What have royal eagle been up to? H&D?
We could always get a surprise with Newfoundland. There is plenty of potential to add value short term and long.
A reminder of 17 December RNS.... we chose not to extend G2 option on El1070, but concluded the best approach would be to work direct with SHP to take it forward.
"Based on discussions with various parties and consideration of all factors, Enegi has reached the conclusion that the best way to generate value for shareholders is to allow G2's option relating to the licence to expire at the end of the option period on 16 December 2018.
Enegi has held discussions with G2 and received a proposal from them to extend the option agreement based on the same technical objective, to achieve a flow test over any interval of Enegi's deep rights. Enegi has also met with the Canada-Newfoundland and Labrador Offshore Petroleum Board ("C-NLOPB") to determine how the licence can be advanced while the moratorium on hydraulic fracturing, which affects the shallow rights held by Shoal Point Energy ("SPE"), is in place. Based on the clear understanding of the current situation obtained as a result of these meetings, Enegi does not believe that G2's proposal represents the best way of achieving value for shareholders and has therefore decided not to extend G2's option agreement. Instead, believing it to have a greater likelihood of achieving progress, the Company intends to take direct contact with SPE to agree the way forward. We will update the market accordingly in due course."
It’s in the RNS dated 28th March. 30/70 split, Marnavi responsible for day to day management of spv.
You are simply wrong. The whole point of an spv is it separates risk from the owners entities. Any limited liability company is limited to the capital they put in, which in our case is likely to be £3 or £300 or something like that.
They are not getting anything for free.... they are the ones making this project possible, making the investment case, working hard to deliver a deal. They are creating the opportunity. You need to understand the risk reward profile of different investors. Providers of debt finance are rewarded with fixed interest or coupon. If you buy a car on finance it doesn’t mean the people putting the money up are going to turn up and expect to drive your car.... they get their return in the interest in the agreement. Security is by means of the asset, the car. It’s the same for any finance unless they are equity investors. Marnavi May sell down some of their 70% but the finance for projects is expected to be through debt not equity investors in the spv.
Starbuck..... firstly that is not true regarding funding.... firstly security for the finance will be in the commerciality of the project and the cash flows to be received, hence they say it will be analogous to shipping finance. The whole point of setting up an spv is to isolate risk within the new entity, to protect it from its parents and vice versa. SPV will likely be a limited liability entity. Therefore the finance providers will be focused on the project returns.
But more importantly your “research” should have told you that MFDevCo will own 30% of the spv and Marnavi will own 70% and be responsible for day to day management.... Marnavi will be parent company to the spv.
Somebody joined LSE today to give "credit" to ADVFN posters!! Not transparent at all is it.
Whether it reached 1.8 on ramping.... it got there without a deal.... where will it go with a deal... and where with multiple deals?
They are a bunch of lunatics that havn't got a clue. Greedy selfish bitter low life.
I certainly will not even think about selling any of these any time soon. I honestly do not need the money any time soon, and i am focused on building a sizeable nest egg not taking profit and running at the first sign of a deal.
This is going to start moving big time when everything falls into place. This will be a sizeable mcap in no time in my opinion, and the sky is the limit. Investors may not be taking MFDevCo serious at the moment, but that will change and they can fast become a deal making machine.
So what? Does it matter....
Read the last few RNS, nothing to do with any poster. It's what the company are about to deliver that matters.
There are hundreds of gas fields in the North Sea alone that could be developed with GTW.....
Many of these are fields where the owner has a decommissioning bill now unless something else is done with it, a bill in the tens of millions. Proven resources with reserves not fully exploited. Perhaps the gas terminal has closed and they have no route to market..... Now if I had an asset that I had to pay £20-£40m to decommission I might be prepared to offload it dirt cheap or free or even pay someone to take it and the decom bill with it. The cash benefit from even deferring decom is huge to owners.
Getting the gas and convincing operators will not be a problem. I believe there is a lot of interest from asset owners.
Convincing the OFA will not be a problem... guess what, they want this, they want reserves fully tapped, they want cleaner energy, they want to reduce the decom bill, they support collaboration and innovation.
This commitment by Siemens to project evaluation and design will be critical as MFDevCo finalises its assessment of the technical and economic feasibility of selected projects and provides the independent verification required to demonstrate deliverability to both partners and investors.
They are not an equipment supplier they are a strategic partner
Factually incorrect.....
At engineering concept and planning stage still, expect to move to final investment decision next year.
They have not named the field.
They are looking at output of 300MW, I believe ours are smaller at around 65MW, which will be quicker. They are looking for 200-300m investment, I believe ours will be much smaller.
https://www.energyvoice.com/oilandgas/north-sea/187487/gas-to-wire-project-hits-mer-uk-bullseye/
Regarding the project in question for MFDevCo, it’s clear OGA are working with operators to make projects happen.
You will not find a record of anything until a project is announced, isnt that obvious! That’s what we are waiting for!!! It’s a bit of a catch 22 status, you can’t submit a fdp, before agreeing a deal, before getting finance.... that is why they say they will announce heads of terms, whilst they take care of approval before closing the deal. I believe they can do this in about 3 months. So spv, finance then heads of terms then signed deal onto development.
So yes news is coming
Nowtnu.... i dont think anyone will disagree with you that it's not going well from a SP point of view. But this share price decline is brutal and has greatly fallen out of sync with the business model and the prospect of multiple deals. Fairly soon the market will be updated with news that it cannot fail to value.
Just becasue there are a group of people talking it down, people selling with no clue whats coming and the market happy to drip it down, that does not mean that there is not a value adding deal coming.
mcadder, i'll add to that, i don't think GTW as a concept is going to have too much difficulty winning over operators. The key is the packaging up as an investible project and making it commercial. The consortium approach certainly helps that and gives MFDevCO an edge to have the weight of companies with much bigger resources.
merchant, agree about MFDevCo being a lean balance sheet for a resource company will be a big attraction. Look at the failure of others due to debt, even PMO and the debt impact there. Also we don't have the hangover of large debt from projects commissioned when oil price was up above $100.
notsure - what is different this time, well we have never been told before how they are going to finance a project. The SPV rns was very revealing, despite the fact that was met with disappointment that it wasnt a signed deal.