TSX:CUS.DB.D - Post by User
Post by
Nawaralsaadion Apr 04, 2014 1:33pm
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Post# 22412675
Salt Caverns
Salt CavernsCUS is sitting on two valuable oil storage salt caverns, those two caverns if developed could bring in between $10m to $20m in incremental annual EBITDA or around 10% increase in the company total EBITDA. The cost to develop each cavern is $15m to $20m, or $35m for both at the mid-point. (numbers are based on Scotia Capital March 2013 research report).
I believe the market continues to substantially underestimate the value of the NATO location, the combination of manifest trains, unit trains, oil storage (above and below ground) and condy handling right in the heart of the oil sands and at an CP/CN interval makes this location an extremely valuable facility. I foresee no issues in CUS recouping its investment in the facility down the line through operating it or through a partial or full sale to an industry player.
Regards,
Nawar