Cascade Power dealGood info all, thanks for all the contributions.
Not much talk about Cascade (probably since no one really knows much about the deal) Below are a couple of excerpts from a couple of the past president's reports and a chart of the historical power pool pricing. If Peyto will be committing 10% -20% of their total production and pool prices stay high Cascade could be quite a game changer : )
Of course power prices might also tank when they bring on all that new supply......
GLTA
Sep 2020 pres report:
We had originally negotiated the commercial terms of a gas
supply agreement to feed this plant back in 2018 whereby we
committed to supply 60,000 GJ/d for a period of 15 years, so
we’re glad the construction has finally begun. It means we can
now begin development of this supply. Of course, 60,000 GJ/d
for 15 years is no small volume of gas. With our heat content
that translates into 52 mmcf/d or a total developed reserve
volume of around 285 BCF (21% of our YE 2019 PDP gas
reserves). In reality though, its actually quite a bit more than
that. As I illustrated back in my February 2020 report, holding
a production level flat for a significant period of time (like 15
years), takes more than just that volume of production, it takes
almost twice as much
But that’s okay. We have more than enough future locations at
Peyto to build this incremental supply. Particularily since the
the expected power prices going forward (Fig. 4) will give us
sufficient revenue to make even our driest gas plays economic.
Oct 2022 Pres report
Our realized gas price for this volume is tied to the Alberta
power pool price which averaged over $250/MWhr in August,
up three fold from a year prior and 6 fold from Aug 2020. This
lucrative opportunity to directly supply gas for Alberta’s
electrical grid is only available because of our infrastructure
investments and plant ownership. If we had sold off our
infrastructure, as some had suggested we should, then its likely
someone else would be benefitting from this deal
below is a chart of Historical Alberta pool prices: