FormerXBC Inc XEBEQ

Xebec Announces $113.5M Order for CO2 Capture and Sequestrat

[RandomMaker]

Xebec Announces $113.5M Order for CO2 Capture and Sequestration Equipment with Summit Carbon Solutions

- Binding contract to supply large-scale CO2 compression equipment for world’s largest carbon capture and storage project -

April 12, 2022 05:10 PM Eastern Daylight Time

MONTREAL--(BUSINESS WIRE)--Xebec Adsorption Inc. (TSX: XBC) (“Xebec”), a global provider of sustainable gas technologies, is pleased to announce today that its subsidiary Xebec Systems USA LLC, has signed a contract valued at USD113.5 million (CAD143.2 million) with Iowa-based SCS Carbon Removal LLC, a subsidiary of Summit Carbon Solutions. The contract follows a previously announced MOU signed on March 28, 2022, for 51 carbon dioxide (CO2) reciprocating compression packages. This equipment will be used for Summit Carbon Solutions’ proposed carbon capture and sequestration project, which is expected to be the largest in the world if approved. This contract represents showcases Xebec’s expanding technology portfolio for carbon capture and sequestration.

“We are pleased to be a key supplier to Summit Carbon Solutions’ project for decarbonization”

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“We are pleased to be a key supplier to Summit Carbon Solutions’ project for decarbonization,” stated Jim Vounassis, President and CEO of Xebec Adsorption Inc. “With this important order, we look forward to helping bring this CO2 pipeline to fruition and playing our continued part in the global energy transition,” he added.

The equipment will be manufactured at Xebec Systems USA’s (formerly UECompression) Colorado facility.

Related links:
https://www.summitcarbonsolutions.com/
https://www.xebecinc.com

About Summit Carbon Solutions
Summit Carbon Solutions seeks to lower greenhouse gas emissions by connecting industrial facilities via strategic infrastructure to store carbon dioxide safely and permanently in the Midwestern United States. For more information, visit: www.SummitCarbonSolutions.com.

[Ciao]

Given this MOU came quicker than one would have thought and also 13.5% more for the same number of units, this was somewhat unexpected and analysts will need to update their models and share price targets and ratings.

[babedinkleman]

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[ZouZS3]

That was a pretty quick and clean release. Jim just dropped execution on the table. Jim's comments are very brief. He's got nothing more to add. That's confidence & assurance.

[Hesiod07]

The overall project still needs to be approved, but we will have to assume there is no market-out provision in the contract with Summit.

[Ciao]

When the MOU was first announced, it was in negotiations to support an order in excess of $100M USD for 51 units, one would think that once finalized the order would exceed $100M USD if more than 51 units were sold. $100M / 51 units under the MOU was $1.96M / unit (averaged out as there are 2 configurations), the average price is now $2.23M / unit. In comparison, a BGX V2 unit was about $1.5M USD

[babedinkleman]

This post has been removed in accordance with Community Policy

[Possibleidiot01]

In one of the recent analyst reports , the analyst made the assumption that landing this contract would be a negative because it would leave a substansial hole in the order when it is completed. A that point , my brain shut down. it's not like the company can't find future orders.

[Hesiod07]

Given the downright stupidity of so much of the analysts' spurious reasoning and fun-with-multiples approach to valuation, it's a wonder they still have jobs.