Green Markets

EWN Publishing

CSM producers’ profit bonanza: Molopo up 615pc, Arrow Energy 124pc, Sunshine Gas 183pc

Posted by gmarkets on 3 September, 2007

So far this year, Molopo was up 615 per cent, which brought its 12-month return to 728.9 per cent, Arrow Energy was up 124 per cent and its 12-month return a stunning 374 per cent and Sunshine Gas was up 183 per cent this year, reported The Australian (5/7/2007, p.34). Producer-prices rocket: The drought, global warming, the reality of carbon pricing and the drought-induced spike in electricity prices have literally put a rocket under the price of coal-seam gas producers. Origin’s Grant King has been in methane gas for longer, has more direct control over his reserves – which are double those of AGL – and in recent times has shown he can commercialise his reserves.

PNG project off the agenda: The deal with Rio to supply gas for its Gladstone alumina refinery expansion was a case in point, with King a direct beneficiary of Santos’s successful program to kill off any hopes Exxon and AGL may have had to build a pipeline from Papua New Guinea to supply the refinery, among other hoped-for buyers. AGL’s Paul Anthony formally pulled the pin on the project amid Santos’s dithering, due largely to lack of ready buyers and cost.

Diversified bases: At a recent UBS energy conference, both King and Anthony pushed the strength of their diversified base, which, although coming from different angles, helped offset the present electricity price spike. Still, the fact was King has been in the game for a decade and was known and trusted by the market, while the market was still making up its mind on Anthony.

Privatisation on agenda: Both were united in their push to get the NSW Government to sell its energy assets for the obvious reason that they both want to buy them. They, of course, would say with some justification that privatisation would clearly benefit both NSW and the national energy market. No matter how many times Anthony banged the table, showing he was fully hedged on electricity prices, some in the market continued to penalise AGL for the fact that with 4 million electricity customers – a million more than Origin – it was perceived to have more exposure to price volatility.

The Australian, 5/7/2007, p. 34

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

 
%d bloggers like this: