A tale of 2 pipelinesThis is a repost from IV where I was answering a question from a poster confused about 2 pipeline negotiations.
I also have a comment about Cormark.
"There are 2 pipeline discussions going on.
Shell pipeline.
This is a discussion with Shell. Mart wants to build their own 50 or so KM pipeline to link with the Shell facilities. To do that they must first have a "petroleum purchase agreement" with Shell. That agreement should be concluded sometime in Q1.
The pipeline will cost around $60M and will be bank financed at 80%. Mart will have a minority ownership with the majority going to Mart's partners and to the local government. Just like the AGIP pipeline where AGIP is a minority owner but the operator. The pipeline capacity will be around 70K to 80K BOPD. The pipeline will take 14 months to build including the permitting and land rights.
AGIP pipeline
They are waiting for some final document but all the lawyers agreed on the terms. It will happen before year end and most probably sometime next week. However until the NR is released there is always a concern. We are talking Nigerian clocks here and they run at a different speed than our clocks.
Bottom line is that I am very convinced that this will be behind us very soon.
Cormark
The Cormark buying of several million shares last week did not come out of nowhere but is not related to a pipeline news. It is related to a lot of work presenting the fundamental of this stock. They bought because they want to make money for their clients and Mart is a screaming buy in their view.
The broker buying will remain high for the next several days with other houses joining in. "
One more comment for some of you that think institutions run to their computers and buy stock right after they are given a presentation by a CEO and if they don't then it means they are not interested. I could name a few posters.
Institutions are given presentations by companies everyday. They listen, give it to an analyst (50% at best) and watch for a while if their analyst comment is "interesting" (10%). Then there is a follow up several weeks later to check if the company actually delivered. Now it becomes "very interesting" let's talk seriously. They have this thing called "due diligence" and "liability" if they don't do it. BTW it does not mean that they never get their feet wet right away they just never make a full plunge.
This was the case for Cormark. The first presentation was in August in NYC if you remember and you know the rest of the story.
GTLA