RE:Condensate rich profit model and LNG implicationsyou can make money selling nat gas. there is a very good reason that pou can't. because they are terribile operators, and don't have good dry gas properties. produing nat gas today is not like it used to be. you have to have a LOW COST Factory with a REPEATABLE process. You have to be focused like a laser beam on every aspect of production and have FACILITIES in place to keep costs low. Like tourmaline. they make money selling gas at these prices. because they have the business plan in place, the management team in place, and the assets in place. they also have a rapidly growing liquids business that is UNDERappreciated by the market.
as for LNG, i must disagree. when shell goes out looking for a long term supply of dry natural gas, they will be looking at companies like birchliff and tourmaline, who have mastered the job of selling lots and lots of gas at low costs. pou will benefit from lng. but only through higher gas prices over the long term. but to say they are an ideal partner for someone like shell, well lets just say I will take the "under" on that one....the CEO of tourmaline and SHELL Canada have an extremely mutually beneficial long term relationship that bodes well for anybody invested alongside the tou CEO.
pablo87 wrote: At 60% condensate, approximately 90% of revenue is from condi and 96% of field netback - is that possible?
Implications are that you drill for the condensate even if the gas field netback is zero. Therefore, its not only reasonable but actually correct to say that not only no capex should be assigned to the cost of gas supply, but additionally, there is no maintenance capital cost to be assigned either - "condensate" pays for everything capex related.
That is a huge supply cost advantage not to have to bear those costs - even if a dry gas operator has all in costs of 0.80 per mcf they still have to drill wells (capex) and maintain production levels by drilling.
There may be some operating costs for which this by product sunk cost approach should be applied as well. Transportation and Royalties I guess is commodity specific.
In theory, the whole process of fetching(separating?) the gas could be outsourced, just give POU x $ back.
Its early stages as only 25% of current production has the high condensate %. To me, it should put in play any of the gas properties that are not along this model.
And for LNG Canada, this is the kind of supplier they want - someone who almost doesn't care what they get for the gas. You can bet Shell is licking their chops. Here, take the gas its free! Or maybe this is what Ontario should be doing!!!
We have the example of the oil rich gas model in the Permian - supposedly gas pipelines are at full capacity, so producers are just flaring off the gas? they don't care, they just want to sell their oil I'm not sure how that works, this is what I read.