Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
With respect to Mr Fraser, I have no great opinion on the guy.
He may be a holdover.
It would not be totally unusual for a company with AALs experience (and set ways of doing things, for good or evil) to review certain aspects of the development plan. Any takeover is like purchasing a house. Only when you do some work on the thing, ripping up the floorboard etc, do you find out how it really works.
The takeover of Sirius was an asset play to get into POLY4, the business case for the product has already been explained by the company. If full ramp-up is delayed a bit, not too fussed.
On a further note, and it is not just relevant to this page, is there any point in chasing down red herrings (not sure of the metaphor)?
Thungela has gone and is a separate company (with its own page on this website).
Sirius has gone, so any grievance people have with the previous management don't really help us on this board.
POLY4 will be material down the line, but as regards current share price movements, you would do well to focus on the prospects and pricing of PGMs, iron and diamonds.
Just IMHO
Once Woodsmith was integrated, the CFO and CDO positions became redundant.
Am not worried if they are reviewing aspects of the development plan as the project will come into action in time.
POLY4 is a great product that meets agriculture needs in a more sustainable fashion from a carbon footprint point of view.
There are other strings to the AAL bow whilst waiting for this project to start.
Surging gas prices but offset by lower (naturally declining) field output (expected down 10% for the full year).
Increased nuclear losses despite much higher prices due to immediate defuelling of Dungeness B.
With Hunterston closing next year (and bringing forward decommissioning costs),
I have been holding out for good news on the upstream front for any indication that decent sales prices might be achieved.
I cant see it.
Hasn't Centrica storage closed? Rough definitely has.
I hope you are right about the Norway assets but I have not exactly seen a rush of interests in E&P assets.
The best buyers are majors who can exploit synergies in matters like pipeline infrastructure. Private equity means a lower selling price.
And as for the nuclear.....
https://www.edfenergy.com/energy/nuclear-lifetime-management
Spirit WILL be doing well this year.
The nuclear plant will also be doing well this year due to surging power prices (high gas and emissions prices).
The main issue I have with this is that it is just temporary.
There is not a great rush to buy mature E&P assets and as for nuclear plant due to close (see link above), forget it.
So, when you strip it down, we have a supply business and a business that manages home installation care.
What is the catalyst for this going up? Serious question? What is the selling point?
Excellent update.
Only one issue is that online sales growth for SIS and PDH was lower than online sales growth via external accounts.
Hopefully that will change going forward. (I want the online sales to be via own website for data management purposes).
But is all looking good.
It is a strange one.
The NAV is based upon independently sourced forecasts of power prices going out over 15 years combined with short term power market curves.
If you look at the EEX and THEICE power prices for the next two years, they are on an upward curve.
This needs to be reflected in the forecasts to have an effect on the NAV.
I assume the forecasts are updated yearly.
RWP53 is quite correct on this.
The 20% stake in British Energy is up for sale. All this means is the potential buyers will be looking for potential problems on the other plant. (Not that there is a rush out there to buy old nuclear, unless I have missed something).
The Spirit E&P assets are in a similar boat.
I struggle to find a catalyst for this stock at all.
Whenever a RNS is released during market hours it is bad news.
The name change was 8:02am.
Almost as if they were embarrassed.
The HDFC stakes SLA has have been hit hard by the Indian covid situation.
The case numbers are truly horrific and there doesn't seem to be an end in sight.
Will weigh on the share price. The crackers name-change is neither here nor there.
Agreed Aspers.
With all this ESG and zero carbon, there isn't actually a great demand to buy mature O&G assets.
And have you seen ANYONE mentioned as being in the hint for buying the nuclear assets.
Strip those businesses out and you are left with a Homecare business and a gas and electricity supply business.
The catalyst is WHAT exactly?
There are two sides to the underlying business (as opposed to the capital structure and management fees).
Assets with contracts for difference (CFD), renewable obligation certificates (ROCs) and feed-in-tariffs (FiT)
Market exposed assets
The former assets have certainty on revenues for 15 to 25 years indexed linked.
The second set assets don't have that certainty and they are exposed to the underlying market market price.
The former set of assets become part of the second set of assets as their support payments fall off.
As time progresses, all of the assets will be generating revenues based upon market prices.
I am optimistic on market due to the CERTAINTY that:
The nuclear fleet will close as their lifetimes come up.
The CCGTs built in the 1990s and early part of this century will close as their lifetimes come up and higher carbon prices make the less efficient (and older) assets close.
New capacity, and renewables are part of this, have to make up the shortfall.
If you have concerns about power prices down the line, then I con understand your concern in holding this stock.
I don't have those concerns.
That the assets are depreciated is normal for any investment business. When the depreciation payments are completed, it just frees up more money to be released to shareholders.
That's the thing with a sum of the parts valuation.
It needs the market to believe the strategy will realise that value.
Selling the Indian stakes and returning the proceeds to shareholders is one means but the jury is still out on the asset management business.
I have had a look at the balance sheet and the net assets are £6.8B.
The balance sheet, however, values the HDFC Asset Management stake at £116m. when, at current share values, it is worth £1.39B.
Adding the market value of the HDFC stake puts the neat asset value at £8B.
With diluted shares of 2239M shares, I put the net asset value per share at £3.57.
Further , the capital surplus over regulatory requirements is £2.3B, which excludes the value of the HDFC stake.
Looking at this, it is plainly a value stock, the issue is whether it is a value trap.
To be fair to the board, the return of capital via a share buyback has been value generative as the shares were purchased way below the net value per share (and below the current share price).
The issue now is how value is generated going forward.
The asset management fund performance has been improving (Aberdeen was a dog for years) but am not sure it is enough to trigger a short term SP improvement.
On balance, am reassured by the underlying business value but not massively excited for the shares in the short term.
(Unless the Indian stock market rockets, but I can get shares in an Indian IT for that.)
Any thoughts/comments welcome.
I liked the honesty of the CEO. Something that has been lacking for years.
the main takeaways for me are:
The Cheniere LNG contract is a dog. Looking at the notes to the accounts , the term 'onerous' is considering being used.
The Sprit sale is going to be tough because, despite the recovery in oil and gas prices, there is a move away from low carbon businesses which is impacting the number of buyers. Being realistic, the natural buyers would be owners of adjacent fields as you can rationalise infrastructure, but those owners are looking to divest.
There was LITTLE AT ALL talk about the nuclear business, so plainly there is not a horde of buyers banging on the door.
The reshaping of the business is so tough to that the CEO could not identify WHEN the net zero carbon strategy would be articulated - possibly in H2.
the only positive seemed to be, 'it cant get any worse'.
The business DOES generate cash, but there is no visibility of the scale.
For me, I see no growth in the business. If you are a bull, you a re bull for reasons that a not articulated in these results.
Oftem raised the price of the retail cap that suppliers charge to customers.
The prices that NG charges for transmission are charged to suppliers (and passed through to customers) but they are fixed. The cap effectively is of the energy charge not the transmission charge.
Or to put it simply, the price cap has no effect on NG.
HI, a fairly put thesis
On the oil price effect on the results we can agree.
On the strategy, I can't see it narrowing the discount.
Time will tell but I can just see the competitors in the renewable space eating them alive.
I worked for over 15 years in the gas and power sector commercial side and BP have never shown much interest in the power side in any meaningful way.
Is a shame, as they wasted the opportunity they had with the deep water expertise in the North Sea and GOM.
Hi, James and HI
regarding HI's analysis vis a vis the forward curve, that is fair enough on cash distributions to shareholders.
On the discount to peers, I would flip it the other way.
The shareholders who held on the back of the pre-summer 2020 strategy will be migrating away, probably to Chevron which is being quite robust in its views of the future of O&G.
For the new shareholders BP wants, they already have access to Equinor or SSE, which are huge in the field BP is trying to get into.
So there are already choices out there and there is a while to wait to see if the strategy is properly delivered.
The dividend argument is a fair one, but with the volatility of the share price, that has less appeal.
All IMHO