GNE - Genesis Energy

[bmrm]

I sold out after the bonus shares vested and have been enjoying a fair bit of schadenfreude watching the SP, but am now seriously considering getting back in. I don't get how it has got quite so unpopular, they could slash the div (not that I expect that) and it would still be decent, yes customer retention is a problem, but its currently below book value!

[Snoopy]

I have been reading up the NZOG page on Kupe, 31% owned by Genesis Energy. The highlighting in the quotes is mine.

From: https://www.nzog.com/where-we-are-ex...and-oil-field/

The page is written from the perspective of FY2014 (ended 30th June 2014).

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Over the next 12 months the joint venture is conducting a review of Kupe’s field development plan to assess whether opportunities in the permit have the potential to be developed.

This will include the evaluation of infill wells to optimise recovery, a number of near-field exploration prospects, and facility upgrade programmes to add or extend production.

An in-well intervention programme to gather and evaluate information from the current well has produced positive early results with increased gas and condensate rates and wellhead pressures.

In addition, the higher shut-in well head pressures indicate that previously untapped gas reserves may be available, trapped beneath shale layers.

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Are we Genesis shareholders on the cusp of getting a reserve upgrade from Kupe?

SNOOPY

[Beagle]

I am worried about you now Snoopy. Your beagle nose is incredibly slow. This was discussed at some length months ago. Meanwhile the price of oil is tanking again and GNE have the worst customer satisfaction of all the power companies. Craigs have a fair value in the late 130's if Tiwai announce full closure...GNE worst affected by miles with no home for their relatively expensive gas fired production and no home for some of Kupe's gas. Worse, their previously held oil futures providing insulation from the big oil drop are running out quickly just like their credits from their depleted imputation credit account. Reduced dividends in FY16 with reduced dividend imputation credits...I think so !!
Who's brave enough to catch a falling knife

[Snoopy]

I am worried about you now Snoopy. Your beagle nose is incredibly slow. This was discussed at some length months ago.

Ah I see your post on 28th January 2015 referring to a press release from NZOG. Despite all the other stuff you highlight around Genesis, it appears probable that Genesis does indeed have access to a lot more gas from Kupe than was suggested in the prospectus. Correct?

SNOOPY

[Snoopy]

Craigs have a fair value in the late 130's if Tiwai announce full closure...GNE worst affected by miles with no home for their relatively expensive gas fired production and no home for some of Kupe's gas.

Do not Genesis have a policy of burning any contracted gas they cannot sell any other way at Huntly? So if you regard the input gas as worthless, the operating cost of burning 'gas without a home' would probably be no more than say running a geothermal power station of eqivalent size would it not?

SNOOPY

[huxley]

I am worried about you now Snoopy. Your beagle nose is incredibly slow. This was discussed at some length months ago. Meanwhile the price of oil is tanking again and GNE have the worst customer satisfaction of all the power companies. Craigs have a fair value in the late 130's if Tiwai announce full closure...GNE worst affected by miles with no home for their relatively expensive gas fired production and no home for some of Kupe's gas. Worse, their previously held oil futures providing insulation from the big oil drop are running out quickly just like their credits from their depleted imputation credit account. Reduced dividends in FY16 with reduced dividend imputation credits...I think so !!
Who's brave enough to catch a falling knife

Guess it depends on your view on Tiwai - if it stays open now could be an ideal time enter/top up GNE

[Crackity]

Who's brave enough to catch a falling knife [/QUOTE]


Ive got my extra thick gloves on Roger - hopefully won't lose any fingers.....

[Beagle]

Ah I see your post on 28th January 2015 referring to a press release from NZOG. Despite all the other stuff you highlight around Genesis, it appears probable that Genesis does indeed have access to a lot more gas from Kupe than was suggested in the prospectus. Correct?

SNOOPY

Probably more gas and some more LPG and condensate but too early to say and with the price plunging its hard to say what its value is.

Others will know more but my understanding is that the most efficient unit, the Unit 5 gas fired generator has a cost of generation of somewhere in the order of $70 mwh...not much good if the wholesale price plummets to $50-60 mwh but as you suggest its probably better to run it than just burn the gas off.

Yes, if you believe NZAS will roll over the contract and Tiwai is still good GNE offers the most leverage to the upside and likewise GNE offers the most downside from the plunging oil price.

Get that nose going mate, where's the SP bottom snoop's ? Will people disappointed they missed a decent IPO allocation at $1.55 get another chance ?

[Beagle]

Ive got my extra thick gloves on Roger - hopefully won't lose any fingers.....

I hope for your sake they're lined with kevlar Market as a whole is a scary beast at present, and that's without the specific risk of playing russian roulette with this puppy and Tiwai point !!

[couta1]

Nice to see that $1.80 mark again

Well that didn't last, might have to take remaining profits if it goes any lower