MPO - Molopo Gas
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Mu5hu
I am not sure that we are meant to or that it is always appropriate to place our own values on shares on this site, further, a share is ultimately worth only what the market dictates. Instead, it is possible to say that (in the authors opinion only) a company is undervalued relative to its peer group, a view that is taken by MPO management - see below link for its open briefing of 7 March 2008. It has substantive advantages compared to various peers, eg:
- excellent management;
- excellent portfolio, balances as to geographical and siverign risk;
- substantial cash assets and no immediate funding needs;
- existing and growing production;
- excellent partners in AGL in Australia and Fortune in China (albeit that China may yet come to naught);
- good paths to commercialistion in several markets;
- a technology that is at least partially tested, as opposed to some entirely speculative UGC technologies.
One of the good things about Canadian, Australian and American licences is that they run a lesser risk of beng nationalised or subject to harsh royalty regimes that some in 3rd world countries. The companies, and there are some, that focus solely on, eg, China have great potential but greater risk.
Further, some of the smaller caps or more recent producers, eg Stuart STU (I disclose holdings), Samson SSN (I disclose holdings), AED (I do not have holdings) and Carnavon CVN (I do not have holdings) have the advantage of having not committed their increasing production under forward supply contracts at 2006 / 2007 prices. They can, in part, immediately take advantage of any increase in oil and gas prices. Those who are not producing or not near production, or have forward supply contracts at older rates, cannot necessarily do so.
Those are complemented by being in a sector that is likely to increase in demand as oil price becomes set at a higher plateau. I am not confident of oil maintaining its current high price, but it does seem likley that the US$40-60 bl are gone, and a bottom in the US$60 - 70 seems realistic. If so, then CBM and UGC are entirely viable.
I am anticpating that MPO may increase to $1.50 to 3.00 over the next 2 - 18months (ie a reasonable step up then potentially trending up but I am not sure to where); a wide range indeed but such are the uncertainties of the market and the exploration business. If, eg, the Canadian gas licences duplicate uranium licences 12-6 months ago, then MPO could, on that basis alone, have a value nearer the $1 billion, which would overall justify a price of $4 - 6.00 per share. That, however, is really at the very optimistic end in the short term. Ultimately, the issue is to what extent its "unrisked" potential need to be depreciated having regard to exploration, economic (global) and other risks.
Eg, if there is a global recession then whist MPO will not reduce to nil, it will likely drop a greater percentage than, say, BHP, with its more stable base. It was, for example, only $.45 a few weeks ago, but I see today continues its upward trend and is $.885 as I write this. It could, therefore, reduce to the $.40's but I think that would be a not quite, but close to, worst case senario and a short term low. I say not quite worst case because a global crash is a possibilty, however my pick is that it will be able to be mitigated by the G8 countries.
In comparision, BHP does not have the same upside potential and that is, of course, why we select small caps, but will likely drop less in a global crash.
All that said, IMO substantially undervalued and I disclose quite significant holdings.
PS: I have disclosed holdings for the purpose of transparency. It is not intended to be a recommendation; nor is the fact that I do not have shares in, eg only CVN, to be taken as adverse. It is an excellent company as well.
http://www.aspectfinancial.com.au/d...Jyb3JwYWdlcy9wZGZkZWxheWVkLmpzcA==&popup=true
I am not sure that we are meant to or that it is always appropriate to place our own values on shares on this site, further, a share is ultimately worth only what the market dictates. Instead, it is possible to say that (in the authors opinion only) a company is undervalued relative to its peer group, a view that is taken by MPO management - see below link for its open briefing of 7 March 2008. It has substantive advantages compared to various peers, eg:
- excellent management;
- excellent portfolio, balances as to geographical and siverign risk;
- substantial cash assets and no immediate funding needs;
- existing and growing production;
- excellent partners in AGL in Australia and Fortune in China (albeit that China may yet come to naught);
- good paths to commercialistion in several markets;
- a technology that is at least partially tested, as opposed to some entirely speculative UGC technologies.
One of the good things about Canadian, Australian and American licences is that they run a lesser risk of beng nationalised or subject to harsh royalty regimes that some in 3rd world countries. The companies, and there are some, that focus solely on, eg, China have great potential but greater risk.
Further, some of the smaller caps or more recent producers, eg Stuart STU (I disclose holdings), Samson SSN (I disclose holdings), AED (I do not have holdings) and Carnavon CVN (I do not have holdings) have the advantage of having not committed their increasing production under forward supply contracts at 2006 / 2007 prices. They can, in part, immediately take advantage of any increase in oil and gas prices. Those who are not producing or not near production, or have forward supply contracts at older rates, cannot necessarily do so.
Those are complemented by being in a sector that is likely to increase in demand as oil price becomes set at a higher plateau. I am not confident of oil maintaining its current high price, but it does seem likley that the US$40-60 bl are gone, and a bottom in the US$60 - 70 seems realistic. If so, then CBM and UGC are entirely viable.
I am anticpating that MPO may increase to $1.50 to 3.00 over the next 2 - 18months (ie a reasonable step up then potentially trending up but I am not sure to where); a wide range indeed but such are the uncertainties of the market and the exploration business. If, eg, the Canadian gas licences duplicate uranium licences 12-6 months ago, then MPO could, on that basis alone, have a value nearer the $1 billion, which would overall justify a price of $4 - 6.00 per share. That, however, is really at the very optimistic end in the short term. Ultimately, the issue is to what extent its "unrisked" potential need to be depreciated having regard to exploration, economic (global) and other risks.
Eg, if there is a global recession then whist MPO will not reduce to nil, it will likely drop a greater percentage than, say, BHP, with its more stable base. It was, for example, only $.45 a few weeks ago, but I see today continues its upward trend and is $.885 as I write this. It could, therefore, reduce to the $.40's but I think that would be a not quite, but close to, worst case senario and a short term low. I say not quite worst case because a global crash is a possibilty, however my pick is that it will be able to be mitigated by the G8 countries.
In comparision, BHP does not have the same upside potential and that is, of course, why we select small caps, but will likely drop less in a global crash.
All that said, IMO substantially undervalued and I disclose quite significant holdings.
PS: I have disclosed holdings for the purpose of transparency. It is not intended to be a recommendation; nor is the fact that I do not have shares in, eg only CVN, to be taken as adverse. It is an excellent company as well.
http://www.aspectfinancial.com.au/d...Jyb3JwYWdlcy9wZGZkZWxheWVkLmpzcA==&popup=true
Finally, a reserves estimate for China Luilin, with an unrisked value to MPO of Au$130 mil.
Perhaps more importantly, it seems that progress is being made and that there are still (therefore) positive relations with Fortune (UK based with excellent Chinese contacts) and CUCBM, both important for furtherdevelopment and expansion.
I note Fortune jumped 12% on the announcement.
See full text of announcement:
http://www.asx.com.au/asxpdf/20080401/pdf/318bb8w1vxlvdb.pdf
Perhaps more importantly, it seems that progress is being made and that there are still (therefore) positive relations with Fortune (UK based with excellent Chinese contacts) and CUCBM, both important for further
development and expansion. I note Fortune jumped 12% on the announcement.
See full text of announcement:
http://www.asx.com.au/asxpdf/20080401/pdf/318bb8w1vxlvdb.pdf
More progress with Mungi and the share price seems to be steadily increasing. See link below.
http://www.asx.com.au/asxpdf/20080403/pdf/318d1xx1p93s5h.pdf
http://www.asx.com.au/asxpdf/20080403/pdf/318d1xx1p93s5h.pdf
I wouldn't have expected such a big jump with this announcement. Nothing in it that was not previously eluded to in earlier announcements. I think a bit of an over reaction and I sold my shares today with the expectation of being able to buy them back next week some time at a cheaper price. Time will tell!
malachii
malachii
Ahh Malachii
You are clearly a trader, I am more of a value investor. I see the price has risen again today on the back of promising news about the Canadian investment. It seems that the MPO acreage may have been an extremely good purchase. See open briefing (link below). As noted in that, it could have a very meaningful impact on MPO's valuation.
Ultimately, all of the announcments recently support the company as being very well managed, ambitious and capable.
http://www.asx.com.au/asxpdf/20080404/pdf/318dsq97dkfmy1.pdf
I should disclose quite significant holdings.
You are clearly a trader, I am more of a value investor. I see the price has risen again today on the back of promising news about the Canadian investment. It seems that the MPO acreage may have been an extremely good purchase. See open briefing (link below). As noted in that, it could have a very meaningful impact on MPO's valuation.
Ultimately, all of the announcments recently support the company as being very well managed, ambitious and capable.
http://www.asx.com.au/asxpdf/20080404/pdf/318dsq97dkfmy1.pdf
I should disclose quite significant holdings.
Yes, more good news from MPO. The announcement today re Quebec contains the framework of some very compelling economics. I read Malachii's post yesterday and remembered how I traded MGX quite well (I thought) twice, buying low and selling high and then waiting for it to drop significantly the third time but it didn't, and so I left a couple of hundred % for the new owner. I don't know what the future is for Molopo but I'm glad I'm holding it. If it got some wider broker coverage it would be interesting to see the result. It will also be interesting to see if " Baillieu" upgrade their report/valuation after the announcements of this week. Forum readers note this report can be seen within MPO's website.
This is not intended as investment advice,after all look what I did with MGX
This is not intended as investment advice,after all look what I did with MGX
Well Pointr
I see MPO is continuing its uptrend and currently is at $.99 to $1.01. It is now developing a quite strong uptrend. I won't repeat all of my previous views re the excellent fundamentals and management team. Good luck with your holdings (I disclose significant holdings).
rub92me
Don't look back
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Close to a breakout from a TA perspective, but it has encountered resistance a few times in the past between 0.90 to 1.00. If it can close above 1.05 today and consolidate above 1.00 thereafter then I'm happy for the short term.
Well Rub. Another excellent day. Increasing volume and price, with 4,313,273 traded, for $4,924,581 and closing at $1.16. It has broken through your barrier range but is still several multiples of the comparative value I assessed. All bodes well though.
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MPO from a techincal perspective has a lot of upward momentum at the moment... things are also looking very promising from a fundamental perspective also... i really can't complain as a fairly new holder... but i am sticking around for the long term anyway...
what i can tell you is that MPO is receiving huge backing from Bailleu's & Bell Potter advisers (SOURCE IRESS)... a few of their advisers are flogging MPO to their clients like no tomorrow... effectively they could be moving the market themselves... i have checked IRESS on quite a few of the up days, and it seems roughly about 25% of the orders are coming from Bailleu's whilst 20% are coming from Bells...
Bailleu's have a $2 price target on this and are extremely confident, I believe it is their numebr 1 small cap... they were backing it when it was trending heavily downwards and looked terrible from TA perspective at $.50c too...
On the flipside we could see some significant resistance should these advisers no longer see it as good value or their clients decide to lock in profits...
what i can tell you is that MPO is receiving huge backing from Bailleu's & Bell Potter advisers (SOURCE IRESS)... a few of their advisers are flogging MPO to their clients like no tomorrow... effectively they could be moving the market themselves... i have checked IRESS on quite a few of the up days, and it seems roughly about 25% of the orders are coming from Bailleu's whilst 20% are coming from Bells...
Bailleu's have a $2 price target on this and are extremely confident, I believe it is their numebr 1 small cap... they were backing it when it was trending heavily downwards and looked terrible from TA perspective at $.50c too...
On the flipside we could see some significant resistance should these advisers no longer see it as good value or their clients decide to lock in profits...
Groundwork - a speeding ticket today (price today AU$1.25.). The explanation (accurately in my view, but not the full picture) focussed on the nearby discovery in the Quebec region, which if mirrored in the MPO region could see a mutiple re-rating. Certainty MPO paid a relatively low price for its area (I think I posted earlier re that). In addition, I see from sources such as Marketwatch that US is l(understandably) likely to take a renewed interst in domestic (and nearby) energy production. Thus not only is MPO a good prospect, but it is placed within an increasingly desirable sector.
I disclose holdings.
http://www.asx.com.au/asxpdf/20080411/pdf/318jh2nv97v7t2.pdf
To quote a car advert " Isn't it nice when things just work"
MPO has had a very pleasing rise of late. When you read their announcement today " north american investor report???" There is some fairly compelling reasons for this stock to outperform. The Bailleau report available on MPO'S website shows a mid point in their valuation of $1.77 from memory, however there has been a few positive company announcements since then. I plan to hold for the long term unless the price goes exponentially silly.
Do your own research, be skeptical its your money
MPO has had a very pleasing rise of late. When you read their announcement today " north american investor report???" There is some fairly compelling reasons for this stock to outperform. The Bailleau report available on MPO'S website shows a mid point in their valuation of $1.77 from memory, however there has been a few positive company announcements since then. I plan to hold for the long term unless the price goes exponentially silly.
Do your own research, be skeptical its your money
Yes pointr. A mid point of 1.77 and a high of 2.45 for 12 months. The report is on MPO's site. As interestingly, Wilson HTM has initiated coverage (with a more comprehensive report), with a target of 1.75 (unrisked valuation of 6.35 per share).
The backing of both brokers can only serve to assist in driving the price upwards (I see the price briefly touched $1.44 on Friday with over $3million of trades). With increasingly positive international sentiment and petrol prices it would not be out of the way for there to be a very rapid increase in price to the target range. See links below for reports.
I disclose holdings.
http://www.molopo.com.au/Baillieu_30_4_08pdf
http://www.molopo.com.au/brokers_wilson_30_4_08.pdf
The backing of both brokers can only serve to assist in driving the price upwards (I see the price briefly touched $1.44 on Friday with over $3million of trades). With increasingly positive international sentiment and petrol prices it would not be out of the way for there to be a very rapid increase in price to the target range. See links below for reports.
I disclose holdings.
http://www.molopo.com.au/Baillieu_30_4_08pdf
http://www.molopo.com.au/brokers_wilson_30_4_08.pdf
thanks for the url for the wilson report. I don't agree with their long -term oil price forecasts, ie back to $55/barrel. I don't base my opinion on any knowledge of anything apart from human nature.
1) Oil consumers have shown they will pay $100 barrel plus.
2) Oil producers have a finite supply of product
3) Oil producers can maintain price by reducing supply.
4) A lot of OPEC nations aren't exactly in love with oil consuming nations.
5) If you were a producer why wouldn't you tighten the tap a bit and make your finite resource last longer and maintain its price and your economy.
6) Lots of people in developing nations want their " turn" at consumption, eg cars- more energy demand.
So there are lots of simple reasons why energy costs will stay high.
So back to MPO, do we stay for a long term multi project story, do we look to T.A for a reason to sell in the short term and buy back in later.
Who knows, not me
1) Oil consumers have shown they will pay $100 barrel plus.
2) Oil producers have a finite supply of product
3) Oil producers can maintain price by reducing supply.
4) A lot of OPEC nations aren't exactly in love with oil consuming nations.
5) If you were a producer why wouldn't you tighten the tap a bit and make your finite resource last longer and maintain its price and your economy.
6) Lots of people in developing nations want their " turn" at consumption, eg cars- more energy demand.
So there are lots of simple reasons why energy costs will stay high.
So back to MPO, do we stay for a long term multi project story, do we look to T.A for a reason to sell in the short term and buy back in later.
Who knows, not me
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all are valid points... but those points didnt happen overnight... they have been a long time in the making... so how can the oil price double in such a short time... simple supply and demand have not moved the price that much...
clearly most analysts believe that the oil price is heavily inflated right now by traders storing their money in commodities whilst everything else has turned to sh*t... when these traders lock in their profits and move their money back into equities we should see some severe downward pressure on the oil price...
well at least i hope the above is true... might have to downgrade my motorbike to a scooter if it isnt...
Well it seems to have maintained its upward trend and the next few weeks could be interesting.
With all the UGC interest, it would be good to know if, after CSM has been extracted, the coal beds can still be used for CCG generation. Does anykonw know? If so, then MPO will have extremely valuable licence areas ...
With all the UGC interest, it would be good to know if, after CSM has been extracted, the coal beds can still be used for CCG generation. Does anykonw know? If so, then MPO will have extremely valuable licence areas ...
Well seeing no one has said anything about MPO for about ten days,I'll put in my. Since the broker reports available on MPO's website with short term valuations of $1.77 and $2.00 ( from memory please check) there has only been positive announcements from MPO. In addition there has been; QGC's pipeline announcement mentioning the Gloucester basin, Global interest in Aust CBM producers, and overseas investment in liquification of coal seam gas projects in Qld. One commentator mentioning the latter investment rerates the CBM industry to a degree. There was some price volatility last week but the stock finished up 10% over the course of the week. There haven't been any announcements of note from MPO since their North American Investor Presentation about a month ago. Having worked in the offshore oil/gas industry I'm aware that pipes have an opening at each end. If I was a gas company and had my choice of having my product taken out in NSW at a low price or at a QLD LNG plant at a higher price I know which one I'd choose, perhaps this simplified reality may increase east coast gas prices. We hold a reasonable number of these, currently with a nice profit, even though the short term targets above look appealing, to my simple mind there appears to be a longer term story that has the potential to generate wealth rather than simply profit.
. Since the broker reports available on MPO's website with short term valuations of $1.77 and $2.00 ( from memory please check) there has only been positive announcements from MPO. In addition there has been; QGC's pipeline announcement mentioning the Gloucester basin, Global interest in Aust CBM producers, and overseas investment in liquification of coal seam gas projects in Qld. One commentator mentioning the latter investment rerates the CBM industry to a degree. There was some price volatility last week but the stock finished up 10% over the course of the week. There haven't been any announcements of note from MPO since their North American Investor Presentation about a month ago. Having worked in the offshore oil/gas industry I'm aware that pipes have an opening at each end. If I was a gas company and had my choice of having my product taken out in NSW at a low price or at a QLD LNG plant at a higher price I know which one I'd choose, perhaps this simplified reality may increase east coast gas prices. We hold a reasonable number of these, currently with a nice profit, even though the short term targets above look appealing, to my simple mind there appears to be a longer term story that has the potential to generate wealth rather than simply profit.
