My feelings | I believe someone, some group or a large entity is keeping NGP’s price down to take her out. Perhaps an owner of a coal fired utility may be circling our company.
We should be selling higher, based on our MW production alone and the JH Loan which is essentially assured, the future production at Blue Mountain followed by NGP’s other sites (even if they are not on the same assurance level as Blue Mountain). Also we should have much higher PPA rates at Blue Mountain in the future.
A quick calculation at PPA rates of $ 75.75, $ 82.12 and $ 90 per MW at 47MW gives:
For $75.50 per MW and production of 47MW net, I get $31.08 million
For $82.12 per MW and production of 47MW net, I get $33.81 million
For $90.00 per MW and production of 47MW net, I get $37.05 million
I figure we will have depreciation and depletion of $7.0 million and total operating expenses of about $6.0 million.
Principal and interest payments based on the $70 million, 14% TCW Loan would be $11.29 million annually over 15 years
Principal and interest payments based on the $100 million, 5% JH Loan would be $8.02 million annually over 20 years. Or a total of $19.31 million over the first 15 years.
In effect, I estimate NGP’s costs would be for 47MW production
7.0 + 6.0 +19.31, or $32.32 million annually.
Assuming a new Fiscal year starting Jan. 2011…
Case 1, with the PPA of $75.50 and 100 million shares outstanding after Jan 2011
(31.08 – 32.32)/100 = (
.012) loss per share. This loss is minimal, especially when NGP will be increasing production at Blue Mountain and developing two other producers, not to mention increased investor interest in alternative energy
Case 2, with the PPA of $82.12 and 100 million shares outstanding after Jan 2011
(33.81 – 32.32)/100 =
.015 gain per share.
Case 3, with the PPA of $90.00 and 100 million shares outstanding after Jan 2011
(37.05 – 32.32)/100 =
.047 gain per share.
All cases look decent for prices between $2 to $4 per share, especially when NGP will be increasing production at Blue Mountain and developing two other producers, not to mention increased investor interest in alternative energy. |
There could be a way out of the TCW 14% Loan based on the aboveestimate,, but I am not 100% sure of the numbers as given below.
If TCM agreed to covert their loan a 20 year loan at rates equal to J.H. (assumedat 5% annually)
They would lose about $58.6 million in interest payments over the years.
Bringing the $58.6 million on present value, using 5% over 20 years would makea present value of $22.1 million. Assuming my estimate of $2 to $4 per NGPshare, we could do it by issuing TCM between 5 to 10 million new shares.
WE could save about $19.31 - 13.64, or $5.67 million annually, that would be anextra
.054 in earnings at 105 million shares, or 0.052 in earnings at 110million shares. This would be for Faulker 1 only.
Case 1 earnings wouldbe from 0.042 to 0.04 per share.
Case 2 earnings wouldbe from 0.067 to 0.069 per share.
Case 3 earnings wouldbe from 0.099 to 0.101 per share.
Based on the above estimates which are not checked.
For an up and coming company making it goals, it couldpossibly send the shares a lot higher than $2 to $4.
The above are estimates, please use your own numbers.