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Old 09-25-2009, 09:11 AM
Sparty Sparty is offline
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Default Copenhagen’s winners = Australia's Gas and Uranium companies

Uranium is mentioned in today's Eureka Report Copenhagen's winners and losers...

Excerpts:

"Speeches delivered by Barack Obama have made one thing abundantly clear. Some kind of worldwide agreement on carbon emissions will be reached at the global climate summit in Copenhagen in December. Kevin Rudd has been equally direct: Australia will almost certainly fall in behind the US."

"It’s enormously bullish for the producers of gas and uranium. It’s going to make life incredibly difficult for the fossil fuel guys, especially coal. It’s probably going to be the biggest turning point in the Australian energy market in 20 years."

"The companies producing gas are in the box seat. In a low-carbon economy, gas is the fuel of choice."

"Right behind the gas companies are the uranium players."

The same edition has an excellent article on OIL supply and costs of new production: "Running on empty" by By Gerard Minack.

It seems that Australia the lucky energy country is going to be in the box seat.

For a bird's eye view of the investment and other aspects:

Visit www.Australian-Gas.com

Visit www.AustralianUranium.com.au

 

Disclaimer: The author of this post, may or may not be a shareholder of any of the companies mentioned in this column. No company mentioned has sponsored or paid for this content. Comments on this forum should never be taken as investment advice.

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Old 09-26-2009, 09:07 AM
Sparty Sparty is offline
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Default Confirmation by China's President Hu Jintao

The MPO bit is in bold. (scroll down)

This is an interesting article that reflects the Eureka Reports comments in their article about Post Copenhagen....

Investment Extra: Gas firm's fortunes improve
Ian Lyall, Daily Mail
25 September 2009

Something quite remarkable happened at the United Nations earlier this week as world leaders gathered in New York before decamping for the G20 summit in Pittsburgh.

It came in the form of a pledge. And it was delivered rather tentatively by China's president Hu Jintao.

But there was no mistaking its importance. Hu told the hundred or so delegates at the UN that the world's biggest polluter was ready to dramatically cut its CO2 emissions.

Alright, it stopped short of giving specific targets, which may not have pleased Al Gore, the former presidential hopeful turned climate change campaigner.

But it was a decisive step in the right direction.

However for those on the ground in the People's Republic, Hu's pledge probably didn't come as a great shock.

For there have already been some fundamental changes - and power generation has been at the forefront of the reforms.

The authorities have been shutting down many of the nation's smaller smoke-belching coal and oil-fired power plants, focusing instead on more efficient gas generators.

In 2007 Beijing removed 55 gigawatts of aged and rickety generating capacity, which means nothing until you realise it is the equivalent to the entire output of all of England's electricity output.

I unearthed this tiny nugget not from a UN document, but from the last trading statement of Fortune Oil, a little known energy company on the main list of the London Stock Exchange that is hoping to cash in on China's drive to prove its green credentials.

Founded by 37%-shareholder Daniel Chiu and run from Hong Kong by former City banker John Pexton, the company has made a bold move into the gas distribution business and supplies 140,000 businesses and households in several major cities including Tianjin, a metropolis of 12m people on the east coast of the People's Republic.

It is part of an eclectic portfolio that includes oil terminals and a business that supplies most of the jet fuel to airports in southern China.

The latter, called Bluesky, has suffered badly of late as a result of oil

price volatility and Beijing's attempts to protect its indigenous airlines.

That said, the troubled division is on the recovery trail and will be a key contributor to Fortune's profits this year.

Further out though, the gas business is a pivotal part of the company's expansion plans.

Currently, its network carries supplies for others. But Fortune's bosses would rather it was used to transport and sell the firm's own gas.

And with this in mind it has acquired a controlling stake in the Liulin coal bed methane project in Shanxi province.

Until February this year getting the resources out of the ground was proving frustratingly slow, mainly as a result of the country's Byzantine rules and regulations.

But things moved on apace after the gas prospect was selected as a State Science and Technology Significant Project, which has fast-tracked the development.

Fortune is not alone in the drilling in Liulin. It owns the majority of the field, but it is partnered by Molopo, an Australian coal bed methane specialist, which owns 26%.

An independent assessment of potential reserves by the Netherland, Sewell & Associates estimates there are between 10 and 23bn cubic metres of gas trapped below ground.

An update to this initial drilling report is expected soon, and could come as early as next week.

It is unlikely to say the find is any bigger than current estimates. But it may 'prove up' the reserves. This means the consultants can say with more certainty how much gas lies beneath the surface.

The test drills are one thing, getting the resources up to the surface is another.

Currently only vertical wells have been put down. For commercial success 'lateral horizontal' reserves must also exist.

However 'the prize for unlocking the block is substantial', according to Oriel Securities analyst Brendan Wilders, who estimates the reserves have a net present value of $185m. However there is another caveat. Liulin is hundreds of miles from Fortune's distribution networks.

While the road and rail infrastructure is there, gas will have to be compressed and shipped out on the back of a truck until the prospect is plugged into the main gas network.

Nobody should think for one minute Fortune's foray into to Chinese natural gas exploration is going to be straightforward.

But there is a ready market for the product, and a will at national level to pay that little extra for greener energy alternatives such as natural gas.

The rump of the Fortune business generates a decent profit - predicted to be £14.7m pre-tax this year, rising to £20.5m in 2010.

That puts the shares on a not-so-cheap 26 times this year's earnings, falling to 15 times in 2010 and there is no dividend. On the plus side, the company has net cash of £3m.

Our verdict: This is one to buy and hold for the long term.

 

Disclaimer: The author of this post, may or may not be a shareholder of any of the companies mentioned in this column. No company mentioned has sponsored or paid for this content. Comments on this forum should never be taken as investment advice.

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