GNE - Genesis Energy

[Bobdn]

Rob Oram spoke about gas prices to Kathryn Ryan and brings some common sense to the debate (discussion about gas starts just after 15 minutes):

https://www.radionz.co.nz/national/p...tator-rod-oram

• He noted that there is still scope for new onshore exploration and discovery in Taranaki; where the infrastructure to use it already exists
• 45% of gas is used to create Methanol (a cheap commodity) - debatable value to NZ economy
• Compared NZ gas prices ($26.20USD/GJ) with those in the US ($9.20USD/GJ) so NZ gas prices from established field is already much higher than international market

I see this as a negative all around, fewer jobs and New Zealand looking like an uncertain place to do business. Government intervention hardly ever ends well.

"Debatable value" really gets to the heart of the matter for me. Markets that are allowed to operate mean no debate is necessary.

[Bobdn]

Bobdn, they lock their sales prices for oil with forward futures contracts...sales were well above spot prices in recent years when oil was very low, as low as $30 barrel.
When oil peaks up they will lose out a bit but you can't have it both ways.
I thought their latest quarterly update was actually very good and am a little surprised that the SP has come under pressure.
Anyone got any thoughts why ?

Yes, that's true. I have a vague feeling that oil was being sold for close to $70 a bbl by Genesis in early 2015 after the market rate had sunk. The presentation of the report could be better in this respect. They present the market rate as a "high" when it actual fact it has no bearing on the price the oil is being sold for so it's actually not a high at all.

[Ghost Monkey]

Bobdn, they lock their sales prices for oil with forward futures contracts...sales were well above spot prices in recent years when oil was very low, as low as $30 barrel.
When oil peaks up they will lose out a bit but you can't have it both ways.
I thought their latest quarterly update was actually very good and am a little surprised that the SP has come under pressure.
Anyone got any thoughts why ?

Might be due to a certain other Beagle...........

"By contrast, the ten year picture for Genesis Energy, in my view, looks pretty dire. Kupe will be virtually extinct. To keep the existing gas infrastructure going will require importation of LNG and all the associated infrastructure for that must be paid for. Big money will be required to replace or seriously upgrade Huntly within ten years. Or will Genesis simply cede their role as a significant generator to other industry players? On a short term basis I see Genesis as well run, and I think many brokers would concur. But I am frightened by the long term headwinds, hence my decision to sell out, albeit at a nice profit, in 2017.

I still hold my positions in Contact and Mercury Energy."

posted by Snoopy on 'Demoralizing-Realization-that-I-can-t-beat-an-Index-Fund'

[MauroNZ]

Looks like the DRP closed on the 6/10 so you may have been too late?

I see the current share price is almost the same as the DRP strike price now, so you haven't really missed out on much at all.

https://www.nzx.com/announcements/316627

On a completely unrelated matter: has anyone else noticed that genesis's oil sell price is consistently lower than the market rate for oil? Our oil is being sold for $56 bbl (barrel of oil) when oil is currently going for $70 bbl. What an absolute waste.

http://nzx-prod-s7fsd7f98s.s3-websit...833/277751.pdf

Got it:

Subject to the above, any notice received
after 5.00pm (New Zealand time) on
a Record Date for a dividend will be
effective only from the next following

https://gesakentico.blob.core.window...4-feb-2018.pdf

dividend.

[huxley]

Don’t they have a large consented wind farm - some 286 wind turbines - imagine a future where Huntley is gone and GNE is largely renewables!

[couta1]

All the listed Power companies are getting hammered at the moment, probably the Govt energy review hanging over their heads teamed with the volativity and random nature of the current Govt.

[huxley]

All the listed Power companies are getting hammered at the moment, probably the Govt energy review hanging over their heads teamed with the volativity and random nature of the current Govt.

This is probably a big concern as all three parties currently in govt seem likely to favour a popular, interventionist move here - its probably safe to say that consumers (generally)take a dim view of power companies- remember the 2014 policy moves in labour/greens? I think they wanted some kind of govt buyer standing between generators and consumers? Shudder.

[horus1]

Margins charged by big retailers to domestic customers have been excessive. Look at the Flick margin of 15-20% saving by buying spot. I think this will be redressed as it has been in similiar reviews in AU and UK. About time.

[Bobdn]

Wow, like Australia? I thought poor regulatory decisions in Australia had bought it's electricity sector to crisis point. Must have got that wrong.

[mondograss]

I suspect after the storm and the trouble of getting the power back on, right now peoples minds are more concerned about the lines networks than the gentailers.