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Some of the Rampers here need to look at the bigger picture and put MPOs gas holdings in perspective-

 

Liquefied gas is looking solid

By Martin Roth | October 28 2009 | The Sydney Morning Herald & The Age (subscribe)

 

Projects involving liquefied natural gas development are shaping up as a major investment opportunity for those with a long-term perspective.

 

More than a dozen projects worth well over $100 billion have been proposed. They may not all go ahead but a sufficient number should proceed, providing a huge boost to the relevant companies.

 

Woodside Petroleum has said that as its massive Pluto project comes onstream, its LNG revenues could soar fivefold. Another company, Oil Search, believes its planned LNG development in Papua New Guinea will lead to a trebling of its annual oil and gas production.

 

LNG production is a complex and expensive process. It involves locating gas deposits, then converting the gas to liquid in order to transport it overseas. Australia has extensive gas reserves and is set to become one of the world's leaders in LNG.

 

As a relatively clean source of energy, gas is increasingly being called for by power suppliers around the world. In particular, demand from the fast-growing economies of Asia is stimulating much of the development work in Australia, although the US ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ where gas reserves are dwindling steadily ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ is also viewed as having long-term potential.

 

Not only is demand growing but prices could rise substantially, providing a further boost to producers.

 

"We are very bullish on the oil price," says a resources analyst at Fat Prophets, Nick Raffan. "I can see it easily back to its all-time highs within a couple of years.

 

"And that will take the LNG price with it, because that is determined according to a complex formula based on the lagging oil price."

 

At present there are "three games in town" for LNG developments, according to Tony Wiggins, the director of specialist resources fund manager EIM Capital Managers, which runs the Emerging Resources Company Share Fund.

 

The first is Western Australia, where Woodside expects LNG production to begin at its $14 billion Pluto development in early 2011, and where a foreign consortium led by Chevron is proceeding with the $50 billion Gorgon project.

 

The second is PNG, where Oil Search has about a one-third stake in a $17 billion project led by ExxonMobil. Formal approval to proceed with the development is expected by the end of the year, with the first production in 2013 or 2014.

 

The third area of development is Curtis Island off Gladstone in Queensland, with a series of major LNG projects, including an $8 billion scheme led by Santos and Petronas, based on the region's coal seam gas with production possible from 2014. Arrow Energy is also active in this region.

 

However, analysts caution that investors should be aware of particular risks involved at Gladstone. "Coal seam gas is actually very expensive to produce," Raffan says. "You need to drill a lot of holes for one production well. I worry about how much the companies are spending on capital development."

Woodside is the key stock for investors looking to participate in the LNG boom.

 

"It is very experienced," Wiggins says. "Woodside has delivered LNG for 20 years. It has an incredible customer base and very meaningful volume growth coming out of Pluto. That is worth something. Clearly, with larger, experienced players who have been doing it for a long period of time, the risk is less than with some junior players who have not done this before."

 

Oil and gas analyst at Hartleys, David Wall, says: "Woodside has built four LNG trains [processing lines] in Western Australia already and a fifth is 80 per cent complete. So that operational risk is largely mitigated."

 

He also rates Oil Search highly. "Oil Search is working with ExxonMobil as operator and ExxonMobil has built a number of LNG trains globally. Quite a lot of technical risk is associated with the construction and operation of LNG plants and this can be reduced if you are with someone with experience."

 

He says investors with an appetite for higher risk should consider companies that are exploring for gas near current LNG developments. Two of these, Tap Oil and Roc Oil, have active exploration programs in Western Australia.

 

Fat Prophets has a long-term buy recommendation on coal seam gas specialist Arrow Energy.

 

Large construction contracts are flowing from the LNG projects, with many more expected. A senior industrial analyst at Hartleys, Trent Barnett, recommends looking at the beneficiaries.

 

From these he recommends Mermaid Marine Australia, which has become Australia's largest provider of marine services to the offshore oil and gas industry. "It is a very good business," he says. "It is getting a lot of work out of Pluto and will get a lot more from Gorgon. It has a high exposure to LNG."

 

He also recommends Decmil Group and Neptune Marine Services, which both provide a range of engineering services.

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Power generation, Queensland

MPO announced on 28th August that it had signed option agreements with various parties to acquire a site in Moura for a gas-fired power generation project based on its CSG interests in Mungi (PL 94 northern sub-lease), in the Bowen Basin in Queensland. The project will be built in two stages, each of 30MW capacity, funded by debt and equity.

The option agreements are conditional on MPO being granted an exemption under the Land Sales Act 1984 (Queensland) to enable a separate title for the preferred site to be created. Once this requirement is met, MPO will initiate the final stages of the feasibility study.

The project is expected to be operational by mid-2011. It will supply electricity into the National Electricity Market (ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Â¦ÃƒƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“NEMÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚ÂÂ) via the existing electricity network. The projectÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s greenhouse emissions will be ~43% lower than those from black coal-fired power stations using existing technology.

The project will have the flexibility to switch from base load operation to peak load, should it be more profitable to sell gas directly during off-peak periods. It is anticipated that the project will be a market generator, thereby ensuring access to the NEM with exposure to potential upside in electricity pool prices. MPO believes that the vertically integrated nature of the Project combined with its on-field location, will ensure that its marginal cost will be competitive against coal-fired generation, particularly following the introduction of the Carbon Pollution Reduction Scheme. In a separate initiative, MPO has also commenced a pre-feasibility study for a 100 MWpower generation project based on gas from its Harcourt South CSG area.

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Gandy thanks for the article it seems you an not so impressed with MPO.

Yes a junior compared to the big guys but also way ahead of a lot of the other juniors that are in the Csg/Csm field and hoping to make a killing. MPO is an earner although very small at this stage. But will be increasing.

Not so the rest of them!

As you are not that impressed by MPO do you own any of the other Csg related stocks on the Asx? If so what of them tickles your fancy? V1

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Gandy thanks for your enlightenment and showing us that mpo is a junior compared to woodside, I have underestimated your intelligence and for that I apologise. My main question is that if you dislike the posters in this forum and mpo so much why do u continue to grace us with your ever so meaningful presence? Also calling people rampers in this forum I find to be disrespectful.
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Pretty soon we will be reading an announcement that MPO has acquired CBM exploration territory in Alberta - or I'm a monkey's uncle

 

Well it wasn't Alberta after all, so how's your nephews and nieces :) .

 

Still Saskatchewan is a lot closer to Calgary than Quebec.

 

h.

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Gandi, Firstly, you can be as realistic as you like but astute investors and traders make money by buying shares cheaply and selling them at a higher price, this is a very simple concept. In addition historically i have found people who big note themselves and are constantly on the defensive are often poor investors/traders who make little if any money. Secondly, given that you constantly refer to mpo on a fundamentals basis I find it to be quite hypocritical that at the same time you can think a company has poor management and assets yet feel it to be a good enough investment to buy. Thirdly, people in this forum do not present "a glossy picture" they present the information they know at the time for all of us to discuss in a proactive manner as that is the purpose of a forum.

 

You seem to like people to provide examples to support all their claims so here is an article i came across which might be of interest (im not sure if this article has been posted yet). Despite what you make think there is not a direct correlation between good news and ramping. For example, below is an article which whilst i find of interest and you would probably see it as ramping

 

Molopo's long and winding road October 26, 2009 12:15PM IT was once a 3c stock. Now it's a producer with shares trading this morning at $1.385 - and an energy success story worth noting.

 

ItÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s Molopo Australia which announced this morning it had its first month of oil production in Canada.

 

While shareholders who bought in just a few years ago will be pleased with the progress across its oil and coal-seam gas portfolio, itÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s been a long and tortuous road for this junior. Had you been a foundation shareholder in 1984, on the other hand, you probably gave up long ago. And, lest we get too enthusiastic about the breaks the company has made for itself, let us remember the great number of juniors that floated and disappeared in all those intervening years, taking their investorsÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢ money with them.

 

There have been a few blind alleys along the way for Molopo. The company got its name from its Molopo Farms platinum project in Botswana. By 1995, however, Mongolia was the bright idea. That year this reporter breathlessly reported that ChinaÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s metal authorities were taking an interest in MolopoÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s Tsagaan Suvraga copper project in Mongolia. (Incidentally, perhaps they should have stuck to that: it now regarded as one of MongoliaÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s largest mineral deposits with 128 million tonnes of contained copper and 43,600 tonnes of contained molybdenum....

 

 

 

By 2000 the company was being controlled by a new group of investors and it had a new, even bigger idea ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ gold in North Korea. True, the new crowd was also keen on coal-seam gas in China, which has turned out fine, but the hermit kingdom of Kim Jong-Il was not such a success story. There was thought to be a million ounces of gold in one tailings dump alone, and Molopo actually got a separation plant going and did some testwork. But, to no oneÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s surprise, it all fizzled out.

 

ThatÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s all history ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ albeit interesting history. How different it is today. Molopo made a $72.6 million profit last year and has plenty of cash in the bank.

 

But it has, more importantly, been expanding into North America by acquiring interests in the Bakken oil formation, which stretches across 65,000sq km of Montana, North Dakota, Manitoba and Saskatchewan. The US Geological Survey has termed it the largest continuous oil formation ever assessed ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ although the oil is dispersed and also it is conventional oil under a shale cover. The USGS has estimated that Bakken may hold 4.3 billion barrels of what it describes as ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Â¦ÃƒƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“undiscovered, technically recoverable oilÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚ÂÂ. Molopo holds ground in the Canadian section.

 

Sounds better than gold in North Korea.

 

The writer implies no investment recommendation and this report contains material that is speculative in nature. Investors should seek professional investment advice. - The Australian

 

So guys, does anyone have any idea of the success of any of the other players who may be involved in this field also or its surrounding neighbours? It would appear to me thats whilst the company focuses on improving production of the bakken field they may perhaps also be targeting proving up a larger resource base also? I liken the Bakken formation to the Plover formation in Australia which many companies have exploited (or tried to exploit) including Nexus Energy, Karoon Energy and Bass Strait Oil.

 

 

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Poseiden I think your statement that "i have found people who big note themselves .......... are often poor investors/traders who make little if any money" has some truth. If you pick out only the positives, ignore things that are not palatable you will be caught out by the market. Unfortuntely these people attract a following who are attracted to the glossy picture and when things dont turn out "they should" its a big but unecessary surprise.

 

I can see why you rate MPOs management as poor; MPO has probably had more failures than the average speculative company over the years, and despite there being mangement changes we can only hope that thing have changed. Certainly the divestment of projects which have been built up to a pre production phase seems to be very sucessfull of late, an Im hopeful the company can keep up this philosophy rather than tangle itself up into a production phase which the company has never been able to do sucessfully in the past.

 

MPO is an explorer and an innovative one, and thats where its strength lies. Build up value to preproduction phase, sell out and move on to a new project. Thats where I hope the company continues to go.

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I am more inclined than most to look deeply into the activities of a company and am often able to see past the gloss that catches many people

Hello again Gandy please extrapolate on the above so we can see what you see in the background of MPO that is preventing you from investing in the company. Cheers V1

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