AST Potential Post Settlement18 Mar 2021 15:56
Good Afternoon all Fellow LTH...
I've been invested in AST since 2017. Here's my take on the potential for AST 6-12 months post possible settlement.
History:
Back in 2017 when AST was waiting for the permit decisions the SP was trading in the 2.5-3p range (pre-consolidation, equates now to 250-300p now), although you do have to factor in some further dilution over the past 4 years so it not a direct comparison. As we know the permit to build a small Processing plant was granted, the other required permits were not...
Possible Settlement:
€20-25million, plus re-stimulation permits and a further 5 year licence until 2026.
What that could mean to AST:
1) AST would be able to re-stimulate the wells to obtain maximum output consistently.
2) AST would have the funds required to build the small processing plant onsite, enabling them to sell treated gas directly into the Slovenian grid. (costs of building the plant were around €10million back in 2017). Note: it would be 12-18months before this would be completed. Back in 2017 AST would of had to raise or borrow the money to build the processing plant.
3) While the processing plant is being built AST can sell raw gas to INA at a higher price and possibly in higher volumes than ever before. Potentially creating a small profit over operating costs.
4) The value of the asset in the ground has increased by at least 50% in the last 4 years (was quoted as €200m in 2017) so now we are looking at €300m plus now.
5) AST would have funds to expand other current projects like Cuba and look for new opportunities without raising funds and diluting the SP, or borrowing from a bank/financial institution.
6) AST would be 100% debt free, and would be able to pay Align back any funds drawn on the recent loan facility.
Based on the potential of all the above I can see AST potentially being worth £100million (MCAP) in 6-12months time which would equate to a SP of 92p.
I'm not trying to ramp, I'm am looking far ahead and the potential longer term affects of a settlement now and not expecting this to happen next week or next month. Tango1 has a slightly higher price target of 150p which is not impossible to achieve either in my opinion. What might be worth considering though is the SP will spike on a good settlement RNS, but greater rewards on your investment might be achieved by holding a bit longer for the potential longer term affects to play out.
Opinions from any fellow LTH always appreciated, if I've missed something positive or negative do comment as I wouldn't want to mislead new investors in AST.
As Always GLA LTH!!
Sign In
Follow the stocks
