GNE - Genesis Energy

[Hectorplains]

I take it this is an excellent update from Genesis

And confirms it's OK to be currently priced with more than the historical 'risk' that was built in

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/GNE/405633/387332.pdf

Kupe gas and LPG sales are well down - on both the previous quarter and for the same time last year.  Sounds like it was expected though, dismissed rather glibly in one sentence as, "Kupe production was down, impacted by scheduled maintenance in November and lower production over the Christmas period." 

[xafalcon]

Kupe gas and LPG sales are well down - on both the previous quarter and for the same time last year.  Sounds like it was expected though, dismissed rather glibly in one sentence as, "Kupe production was down, impacted by scheduled maintenance in November and lower production over the Christmas period." 

Sales of Kupe products that aren't made now, are still in the ground. It's not like they have evaporated. They will be made and reported in the future. The lions share is natural gas, which isn't directly tied to international prices as it is "stranded" in NZ. So no big losses as a result if not extracting and selling while international NG prices were high. Different story with oil, but we are only talking kT per quarter

The key take-away for me was the huge increase in H1 renewable generation, and the significantly higher than average hydro storage levels (meaning Q3 should also be good)

Overall GNE looking very solid, and the market likes it

[Hectorplains]

very solid, and the market likes it

LOL, GNE is up .36% or 1cps... But as you say solid rather than exceptional. 

[xafalcon]

LOL, GNE is up .36% or 1cps... But as you say solid rather than exceptional. 

Was +3 when written, and currently +2

Anyway, let's see what the price is at market close

Potentially more upside if Lake Onslow gets the chop under the lefts new leader

[Hectorplains]

Was +3 when written, and currently +2

Anyway, let's see what the price is at market close

Potentially more upside if Lake Onslow gets the chop under the lefts new leader

It's odds on that Onslow is now dead in the water - so to speak. 

All fingers on the East Coasts forestry 'slash' issue are pointing to a wood pallet solution.  Meanwhile Genesis are experimenting with wood pallets to fuel Huntly....or maybe I'm joining up too many dots.

[Basil]

Chart starting to look interesting.  Breakout above the 100 day MA.

[Shareguy]

Strong margins and lower costs with significantly higher than average levels of hydro storage.

Pleasing to see further increases in market share in the retail space.  SP has been slowly increasing last few weeks.  Note bond yields have decreased.

In a article from business desk today

Fbar anticipate Project Onslow will be shelved in favour of smaller, better located and lower cost/lower risk options."

Onslow decision was put on hold last year maybe to give a new leader a graceful exit.   

[Plata]

Looks alright but not all roses. The ever diminishing O&G assets have contributed a higher % to revenue this year vs last year, with electricity sales revenue down on last year? Makes me wonder, if cost of generation is around $80 per MWh and they sell it for $280 per MWh to residential customers... the economist in me would ask why they aren't trying to steal some customers by offering some deals? Wouldn't want to start a price war I suppose...

[Basil]

Early talk about Labour shelving non urgent projects suggests lake Onslow is dead in the water.
GNE reacting to that new reality and the much lower 10 year risk free rate, making quasi utility "bonds" more attractive. Clear break up through 100 day MA could see this crack through $3 resistance soon.  Happy to take a "dogged" approach to holding this for reliable income long term.

[Shareguy]

Interesting article I thought

https://www.nzherald.co.nz/business/john-carnegie-the-need-for-energy-diversity/ILRSHJLOPJHS7I7ZPUJ5VWOHCQ/

[Raven]

Early talk about Labour shelving non urgent projects suggests lake Onslow is dead in the water.
GNE reacting to that new reality and the much lower 10 year risk free rate, making quasi utility "bonds" more attractive. Clear break up through 100 day MA could see this crack through $3 resistance soon.  Happy to take a "dogged" approach to holding this for reliable income long term.

Perhaps Onslow not completely dead just yet?
https://www.stuff.co.nz/environment/climate-news/131106241/power-companies-dont-have-green-interests-at-heart--watchdog

[Basil]

How long are the current lot in power going to be there?
Pretty sure National have ruled this out.

[winner (n)]

How long are the current lot in power going to be there?
Pretty sure National have ruled this out.

Be a bugger then if Luxon stuffs up big time and losses the election that was his to win.

[Basil]

Be a bugger then if Luxon stuffs up big time and losses the election that was his to win.

Chatted with him a few times after AIR annual meetings.  A very affable, likeable and clever guy.
One risk I see is he is fairly new to politics and maybe some of the extensive numbers of new Māori media participants Labour trained up with their special $30m funding for new journalists (only if you were the right colour) might have an agenda against him and he might struggle to deal with their potential overt provocations.  It's going to be a fiery election campaign that's for sure!

[Shareguy]

Agree. We now have a contest that could go either way. Hopefully our new PM shelves it sooner than later.