CNX - Carbon Energy

[basilio]

So what was the trigger for the 3.30 rush today? CNX is just ambling along doing nothing. And this is after what was a really very positive report from the day before. Great reserves, better than anticipated gas flow and I thought some very telling statements about just how much potential gas there was available

50% of Queenslands electricity demand for 15 years or
All of Brisbane's natural gas demand for 60 years !

And this is just from the coal seams thicker than 5 metres.

And then bang. Six million shares moved and a 27% jump in SP
Perhaps it says that market analysts take at least one and half trading days to actually digest significant announcements.

Or is that a big contract in your pocket...

Glad to see some green at last..

 

[Mickel]

I agree that it's good to see some green at last, Bas.

The trick may have been expressing the energy in PJs and what they could power, so investors can compare with the Coal Seam Companies which are rising like wildfire.

I hold.

 

[Mickel]

Another almost 10% jump in S/P of 4c to $0.45 on turnover of 7.6m shares today.

More recognition of the value of the gas they are producing ? I think so.

I hold.

 

[phong_01]

Not sure if they are speculating on IPL obtaining the loan facility for working capital. IPL may use this to acquire CNX?

 

[Mickel]

ASX Announcement this morning-

HOA to purchase Coal tenements in WA and to produce and sell Gas commencing Dec 2010.

Ref http://www.asx.com.au/asxpdf/20090401/pdf/31gvy02703m0v1.pdf

Obviously some knew this was in the wings yesterday with 6 m shares traded and 10% + price increase.

CNX currently up 3c to $0.53 with sales of 3.3m shares after reaching high of $0.55.

I hold.

 

[basilio]

Good to see both some commercial activity with CNX and a due reflection on the SP.

I would be interested to know what sort of financial result CNX could expect from the proposed WA project. Obviously a bit early to say but you can only ask.

I believe tt also a good sign that this WA project is (seemingly) out of left field. Until know I believed there were 2 possible developments - IPL fertiliser and the European chemical plant. So this is a welcome development. Anyone else have any thoughts?

 

[basilio]

Good to see both some commercial activity with CNX and a due reflection on the SP.

I would be interested to know what sort of financial result CNX could expect from the proposed WA project. Obviously a bit early to say but you can only ask.

I believe it also a good sign that this WA project is (seemingly) out of left field. Until know I believed there were 2 possible developments - IPL fertiliser and the European chemical plant. So this is a welcome development. Anyone else have any thoughts?

 

[grace]

Good to see both some commercial activity with CNX and a due reflection on the SP.

I would be interested to know what sort of financial result CNX could expect from the proposed WA project. Obviously a bit early to say but you can only ask.

I believe tt also a good sign that this WA project is (seemingly) out of left field. Until know I believed there were 2 possible developments - IPL fertiliser and the European chemical plant. So this is a welcome development. Anyone else have any thoughts?

wow, I wish I owned the other company involved....last time I looked today it was up over 100% (was it gpp (enb thanks to edit mode) or something, can't remember exactly, it was on my watchlist). I remember researching the WA coal seams, and they are indeed fairly deep I thought. I bit suspect for csg, but for a different process, might be alright. I might do some more digging now.

 

[Mickel]

wow, I wish I owned the other company involved....last time I looked today it was up over 100% (was it gpp (enb thanks to edit mode) or something, can't remember exactly, it was on my watchlist). I remember researching the WA coal seams, and they are indeed fairly deep I thought. I bit suspect for csg, but for a different process, might be alright. I might do some more digging now.

Grace, CNX has also done ok in March with a rise of over 100% as per this chart-

http://hfgapps.hubb.com/asxtools/im...&ds=cnx&dovs=XJO&val=1&stmp=20090402004241956

In the ENB Half Yearly Report in 2/09, under directors report, they stated their coal tenements were suitable for UCG and they were talking to various experts about UCG.

Of course in the latest announcement, under the HOA, CNX will acquire these tenements for 30M CNX shares.

The question for CNX , as I see it, is how they will fund the drilling of these tenements and the subsequent production costs for the gas. Will it be a rights issue or, in these tight funding times, an institutional placement ?

Any comments ?

I hold.

 

[TheAbyss]

Looking at CNX you would have to ask the question, why the reticence in expressing what they have?

Last month’s announcement re the Bloodwood commercial trial (68% methane and ethane) was fantastic. Forget the CTG technology for a minute and look at the potential resource value.

CNX estimate 2890 petajoules of methane/ethane based on 364 million tonnes of coal in seams equal to, or more than 5 metres thick according to their own data from the trial. If the rest of the coal reserves are included (668m tonnes) CNX have around 5,303 petajoules. This compares with an upper estimate of 259 petajoules from AOE.

Yes, CNX can produce 11 to 50 times more methane/ethane than Arrow can.
CNX share price 40 cents v AOE circa $3 and I know what I am buying these days.

Surely CNX will become a takeover target at some stage on the reserves alone. Add to that the UCG technology and a possible coal asset sale and this could do us all some good. imo.

CNX have the equivalent feedstock for running 6 world scale manufacturing plants for 30 years.

 

[springhill]

Interesting movement in a couple of UGC players today

CNX up 11.4% on 5.9m volume
CXY up 15.4% on 9.5m volume (cant remember the last time CXY had this volume moved)

No important announcements due out from memory
Any thoughts?

 

[Mickel]

Interesting movement in a couple of UGC players today

CNX up 11.4% on 5.9m volume
CXY up 15.4% on 9.5m volume (cant remember the last time CXY had this volume moved)

No important announcements due out from memory
Any thoughts?

Springhill, I think with the rise of LNC over the last 4-6 weeks from $1 to $2.50, and the comparative details that both LNC and CNX have released with 3P reserves of CSG companies, have educated the market as to the relative value of the UCG companies. Also, the quarterly reports released today have emphasized this.

I hold LNC and CNX.

 

[springhill]

Springhill, I think with the rise of LNC over the last 4-6 weeks from $1 to $2.50, and the comparative details that both LNC and CNX have released with 3P reserves of CSG companies, have educated the market as to the relative value of the UCG companies. Also, the quarterly reports released today have emphasized this.

I hold LNC and CNX.

Thats a strong possibility Mickel, but its the unusual volume of CXY thats pricked my ears. They are nowhere near (and have never mentioned) any ballpark PJ figure for their project
Was their discussions at the COAG about this industry? The Fed & the Qld state govt have slighty different opinions on UGC

Just thinking out loud
Todays performance will tell the story

 

[Mickel]

Springhill, an extract from CXY's ann on 20 Apr-

"While it would be unrealistic to expect all of the coal within the Designated Areas to be
amenable to the UCG process, the size of the areas, the vast coal resource contained within
them, and the evidence from existing drill data, all suggest that there will be an ample coal
resource to meet the requirements of a very large, long-term UCG project. Even if only 10%
of the Designated Areas proves to be suitable for the UCG process, the target coal resource
for a drilling program would be of the order of one billion tonnes with a potential gas
production energy content of about five thousand Petajoules, or sufficient energy to supply a
1000MW power station for 100 years.

It may have taken a few days for this to have sunk in. My opinion only.

 

[Mickel]

Further to my last post, some caution is required as the potential coal resource of over a billion tons is not owned by CXY but their JV partner.

 

[johannlo]

I am liking it very much, though my natural instincts recoil at buying at a high. Also I think gas prices are high at present

Nevertheless if the statistics are correct then they have so much potential. Unfortunately I don't know enough about the industry to crunch figures like some of the above posters but they make enough sense to a newbie like me. Just on fundamentals alone they have 137.8m total assets with only 1.1m liabilities and burning 2.4m last FY, looks incredibly healthy to me. The CSIRO stake + partnership with IPL (which I hold) is also big swing factor in my book.

Am thinking to watch it for a while and jump in the next small dip OR get in on the act if it gains substantially and holds for a sustained period.

 

[Smurf1976]

five thousand Petajoules

Putting this figure in perspective...

Enough gas to supply the entire natural gas use of NSW, ACT, Vic and SA (combined) for a bit over a decade.

Or enough gas to supply Victoria only for over two decades.

Tasmania uses about over 115 PJ each year in total energy from all sources (hydro, oil, coal, gas, wood, wind) and for all purposes (electricity, transport, industry etc) combined.

So 5000 PJ is no Middle East that's for sure, but it's certainly a significant resource. At typical Eastern states gas prices it's worth in the order of $15 billion, considerably higher at major market international prices.

 

[Smurf1976]

I should add, that in the first week of the oxygen gas trial 800 tonnes gassified with 16,000 gj of gas energy produced. Sino Ore is reported as paying US$7.80 gj for gas when oil is at US$50 (see link:
http://www.theaustralian.news.com.au/business/story/0,,24885298-5018015,00.html), so if we take that as a rough and ready guide the value of the energy produced in the first week from one module is about US$124,000.

Gas prices vary a lot depending on location. The underlying trend is towards globalisation of the market and an international price similar to what we have now with oil. But at present, gas in the Eastern states is worth a lot less than that and it varies a lot internationally - there's still places where it's basically worthless.

I'd also note that the process is about 70% efficient at recovering energy from the coal in the ground. That's better than the losses associated with conventional mining in a lot of cases.

A few figures for reference:

Depending on the grade of oil, there's around 6.3 GJ per barrel (it does vary a bit with oil types however).

Black coal is generally 22 - 30 GJ per tonne, most commonly somewhere around 28 GJ. There are some exceptions outside this range.

Brown coal is typically 10 - 15 GJ per tonne as taken from the mine (generally with a high moisture content). Drying can increase this figure - the old brown coal briquettes were 22.4 GJ per tonne.

And not that it's overly relevant, but dry (20% moisture) firewood is generally taken as being 16.2 GJ per tonne.

 

[Mickel]

Putting this figure in perspective...

Enough gas to supply the entire natural gas use of NSW, ACT, Vic and SA (combined) for a bit over a decade.

Or enough gas to supply Victoria only for over two decades.

Tasmania uses about over 115 PJ each year in total energy from all sources (hydro, oil, coal, gas, wood, wind) and for all purposes (electricity, transport, industry etc) combined.

So 5000 PJ is no Middle East that's for sure, but it's certainly a significant resource. At typical Eastern states gas prices it's worth in the order of $15 billion, considerably higher at major market international prices.

Bear in mind that this FIVE THOUSAND PETAJOULES refers to Cougar Energy's Joint Venture partner's coal tenements.

 

[springhill]

Carbon looks to be making another (failed?) assault on 53.5, a noted sticking point in the past. Good volume in the last half hour has it gaining momentum
Thoughts on a possible breakout or breakdown even?