Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on LIQUEFIED NATURAL GAS LTD. We currently have 4 research reports from 1 professional analysts.
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LIQUEFIED NATURAL GAS LTD
LIQUEFIED NATURAL GAS LTD
19 Dec 16
The Magnolia project has received two positive pieces of news in the last few weeks, which helps move the process towards project sanction and possible first LNG in 2022. The Department of Energy (DoE) has authorised non-FTA exports for Magnolia’s LNG, following a decision by the US Federal Energy Regulatory Commission (FERC) to deny a rehearing on the Magnolia project requested by the Sierra Club. This is a big step as it allows for exports to all LNG markets globally including Europe, China and Japan. For the moment, we leave our valuation unchanged at A$1.3/share (falls slightly on an ADR basis to US$3.8), but note these announcements pave the way to signing offtake and financing agreements and project sanction in 2017/18.
Ready to pull the trigger on Magnolia
28 Oct 16
Liquefied Natural Gas Ltd (LNGL) is a developer of LNG liquefaction facilities, initially in North America, and holds patent-protected technology that promises lower-cost, highly efficient LNG across many global markets. The company is finalising offtake and awaiting a final DoE non-FTA export order to proceed before it can reach financial close at the Magnolia project. Binding EPC contracts mean that costs of development should be contained, while production (if sanctioned soon) could start up in 2022 as the global LNG markets tighten from the current glut. We believe uncertainty over the projects is a major reason behind the current share price, which has the potential to re-rate strongly if and when the project(s) are sanctioned. Our current risked DCF approach values LNGL at A1.3$/share (US$3.9/ADR), but this could grow very materially.
Awaiting binding tolling agreements
26 Apr 16
Liquefied Natural Gas Ltd (LNGL) has continued to progress the Magnolia project, with EPC contracts signed in recent months that put the project on a much firmer footing and effectively fix costs for the development (now out to 31 December 2016). Although the contracts call for a higher capital cost than previously guided, Magnolia should still be at the lower end of LNG development costs and have lower operating costs, encouraging investment by tolling partners. We expect tolling agreements to be signed in 2016 to enable financial close (the FERC order has just been received). Given the low costs and continued need for global LNG supply, we continue to believe that Magnolia should proceed, albeit in a tougher environment. We have substantially re-modelled the projects given the new information, resulting in a new NAV of A$1.0/share (US$2.8/ADR).
Assets and long-term growth
15 Jul 15
Liquefied Natural Gas Ltd (LNGL) has two LNG liquefaction projects in development with planned start-ups in 2018/19. The company is using its own patent protected technology (OSMR®), which should lead to lower capex and opex costs. Lump sum turn-key contracts are being finalized, while tolling fees arrangements mean that cash flows from the projects are predictable (and material). Despite the significant share price rise in the last 18 months, our modelling indicates that there is significant value accretion available for investors. Our risked DCF approach implies a value of A$3.7/share (US$10.9/ADR), but a NAV over time reveals that this could increase to over A$9/share (US$27/ADR) in 2019.
The Slide Rule
12 Jan 17
What is The Slide Rule? The Slide Rule has been designed to dramatically simplify the identification of the best companies in the UK small/mid-cap sector by making a quantitative assessment of the relative potential of each company. At its core, The Slide Rule aims to identify those companies that create genuine shareholder value through strong returns on capital and solid growth, but also present a value opportunity with the potential tailwind of earnings momentum. Companies are assessed within a Quality, Value, Growth and Momentum (QVGM) framework.
The Monthly January 2017
09 Jan 17
Despite all the hullaballoo of the Brexit vote and the subsequent election of Donald Trump as the next US President, the UK stock market prospered last year, especially in the latter few months of 2016. The combination of a depreciating currency – making $ earnings more valuable in relative terms - and the Trump emphasis on infrastructure expenditure drove the stock market higher
10 for 17
09 Jan 17
As always at the start of a year, there are significant uncertainties about the year ahead but I think in 2017, the level of uncertainly has decisively moved up a gear. In fact, a leading economist at the LSE, Ethan Ilzetzki, was recently quoted as saying “I view the current global economic environment as the most uncertain in modern history”. Wow.
Minor delay but lower cost and better visibility enhance the investment profile
13 Jan 17
First oil at Stella is delayed by about a month, reducing the contribution of Stella to FY17 production by the same period. While this has an impact on FY17e free cash flow, this is negligible to our valuation. More importantly, FY17 opex are estimated at only US$18/boe, below our estimates of US$20/boe. There are opportunities to reduce opex further. Harrier is expected to reach first oil in 2018, one year earlier than we expected and at a cost of US$40 mm lower than we anticipated. The overall development cost is less than US$6.0/boe. Ithaca holds numerous discoveries around Stella that would be developed with a similar cost structure to Harrier.