GREY:LGVWF - Post by User
Comment by
Nawaralsaadion Jul 19, 2013 4:26pm
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Post# 21618893
RE:RE:RBC ups cash flow estimates for LNV
RE:RE:RBC ups cash flow estimates for LNVYou are exactly right the advantage strategic process has a major influence on Longview, however I am bit more optimistic that Advantage will be sold, despite the time it takes to get those LNG projects going a number of deals for NG assets in the Montney has taken place, most notably Exxon for Celtic energy and Petronas for Progress Energy. The lead time for those projects is multiple years and securing supply is a key component of that.
However a failure to sale Advantage could also unlock value at Longview (albeit it may take longer), since a failure to sale Advantage would force management to seek a buyer for Longview in order for them to finance the development of the Glacier asset. Advantage is short $150m to go from 100mcf to 200mcf in 2015, which is their plan going forward as a go alone entity. Liquidating Longview would exactly cover that shortfall under the no-sale scenario.
Meanwhile as the above plays out, we get to enjoy a hefty dividend and a strengthening balance sheet due to much higher energy prices.
Regards,
Nawar