The Energy Report
Notable Quotes
"With the LOI signed, we urge investors to bolster positions in FCU." (12/22/15) Fission Uranium Corp. - David Sadowski, Raymond James More >
"FCU is taking the right steps regardless of whether PLS is ultimately acquired or developed into a mine." (12/22/15) Fission Uranium Corp. - Heiko Ihle, Rodman & Renshaw More >
"I am quite excited about POE in 2016." (12/16/15) Pan Orient Energy Corp. - Chen Lin, What Is Chen Buying? What Is Chen Selling? More >
"BKX's Oklahoma asset has significant value." (12/16/15) BNK Petroleum Inc. - Michael Charlton, iA Securities More >
"EFR is one of the few companies in a position to write long-term sales contracts and deliver into them at several times its current production rate." (12/17/15) Energy Fuels Inc. - The Gold Report Interview with Eric Coffin More >
RPG: San Jacinto Delays Create Buying Opportunity
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SEAN PEASGOOD, Wellington West Capital Markets
(02/08/2011)
"Ram's premiere management team trips up on execution at San Jacinto. Phase I & II both delayed by 3 months. Two wells need to be re-drilled for phase II, adding risk to the project. Phase I capex expected to be ~$20M higher and phase II $32M higher. Phases I and II impacted by higher material/labor costs and construction delays. Ph II re-drilling costs expected to be $27M (complete May 2011). A $50M two-year bridge financing is expected to fund additional costs. Bridge will fund drilling and development as certification for 64.8 MW (currently at 60 MW gross) needed to tap $160M phase II debt facility. In light of the recent setbacks in Nicaragua, we continue to believe Ram Power is well positioned to be a leader in the geothermal industry. While 2010 was a difficult year in general for geothermal stocks, and 2011 has not started as expected for Ram, we continue to believe management will succeed in bringing projects online. From a macro perspective, the fundamentals for geothermal energy remain compelling given its green energy attributes, baseload nature and competitive levelized cost versus other energy sources. In addition, with an increasing concern about U.S. energy security, geothermal offers a highly reliable, low-cost resource that is not reliant on imported fossil fuels. We are reiterating our Buy rating but lowering our target to CAD$3 from CAD$4.50. Our lower target incorporates higher capex, delayed commission dates and increased debt for San Jacinto-Tizate (SJT) phase I and II expansions. . .We believe the weakness in the stock presents investors with an excellent entry point added uncertainty in phase II may keep some investors on the sidelines until visibility on drilling improves." |
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Under SEC rules, analysts are required to disclose their interest in securities that they cover. We strongly encourage you to contact them to understand any potential conflicts of interest they may have.
More Experts
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