Leigh Creek Energy: South Australian Energy Prospect
Edison | Feb 02, 2017 07:51AM ET
Leigh Creek Energy Ltd (AX:LCK) offers investors an option over the in-situ gasification (ISG) of an underground coal resource in the state of South Australia (SA). Recent power blackouts in SA have highlighted the need for more baseload power generation capacity, while high electricity prices incentivise the monetisation of 2,964PJ of 2C ISG gas resource at the Leigh Creek Energy Project (LCEP).
The development of LCEP is not without risk and uncertainty at this stage; however, if LCK is able to attract development funding and mid-stream/power infrastructure partners, LCK could be worth materially more than its A$40m market cap. Our 2C risked valuation after farm-down is A$83m (A$0.31/share) based on a subjective 20% chance of success.
South Australia power market dynamics
SA is the highest priced domestic gas and power market and state-wide blackouts as recent as 28 September 2016 have highlighted a need for greater within-state baseload power generation. This would augment renewable sources (largely wind and solar) as well as underpin supply when the inter-state grid connection is offline. The government of SA has regulations in place to specifically permit ISG operations and is supportive of the monetisation of deep coal-resources.
To read the entire report Please click on the pdf File Below
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.