Sacgasco poised to pounce in the Australian energy sector.
Summary
TLDRIn the 'Market Open Direct' webinar, Stuart Walters hosts Kane Marshall, Managing Director of Sasco Limited (ASX: SGC), to discuss the company's recent operations and future outlook. Marshall highlights the company's shift in focus from international assets to domestic opportunities, particularly in natural gas, amid the energy crisis in Australia. He also addresses the company's rebranding to reflect its commitment to oil and gas, contrarian to the prevailing decarbonization trend. The discussion includes potential investments in larger-scale projects and the strategic advantages of the current geopolitical and energy market conditions.
Takeaways
- 📈 Sasco Limited is focusing on diversifying and broadening its portfolio, with a shift towards more domestic upstream opportunities, particularly in natural gas.
- 🌏 The company has almost completed its need investment and is now looking to rationalize its portfolio, moving away from positions in the Philippines and potentially North America.
- 🛑 There is an ongoing issue with non-payments from Blue Sky Resources after Sasco's exit from the Philippines, which the company is working to resolve.
- 🔍 Sasco is currently reviewing several projects, mainly in Western Australia, with a focus on low-entry point acquisitions that have significant upside potential.
- 🏭 The energy market in Western Australia is strained with high gas prices and a lack of new supply, presenting an opportunity for junior companies to explore deeper gas potential.
- 📉 Gas prices in California are currently weak, which is a factor in Sasco's strategic planning as they have significant operations in the energy-hungry state.
- 🌱 Sasco's management believes that oil and gas companies are part of the solution to a cleaner economy, not the enemy, and that their products are essential for the materials needed in electric vehicles and decarbonizing economies.
- 🛑 The company is considering a name change back to 'Australian Oil Company' to better reflect its focus and be more recognizable in the market.
- 💡 There is a supply issue with reliable, low-emission electricity in Australia that the government has yet to adequately address, which Sasco sees as a significant opportunity.
- 💼 Sasco is looking for larger opportunities that have been overlooked by bigger companies due to regulatory issues and a shift in focus abroad, such as in PNG and Alaska.
- 📊 The equity markets are currently strong and favorable for energy investments, and Sasco aims to capitalize on this by raising capital and securing new projects within the next six months.
Q & A
What is the main focus of the Market Open Direct webinar series?
-The Market Open Direct webinar series is focused on providing a platform for companies to tell their story, explain why it's compelling, and present why it's an opportunity for investment.
Who is the host of the webinar and who is the guest speaker in the provided transcript?
-The host of the webinar is Stuart Walters, and the guest speaker is Kane Marshall, the managing director of Sasco Limited.
What has Sasco Limited been focusing on in the last six months according to Kane Marshall?
-In the last six months, Sasco Limited has been focusing on the completion of an investment need, divesting their position in the Philippines, and looking at opportunities to broaden and diversify their positions in North America with a more domestic focus on natural gas.
What is the current situation with Sasco Limited's investment in the Philippines?
-Sasco Limited has decided to divest their position in the Philippines, as they believe it is not an area they need to be in over the next six months.
What is the energy situation in California according to the discussion?
-California is described as an energy-hungry state with currently weak gas prices, and structurally different markets compared to Australia.
What opportunities is Sasco Limited looking at in Australia?
-Sasco Limited is looking at opportunities related to the energy crisis on the east coast of Australia and the deficiency in gas supply in Western Australia, with a focus on natural gas and potentially oil as well.
Why is Sasco Limited considering a name change back to its founding name?
-The board of Sasco Limited is considering a name change back to its founding name, 'Australian Oil Company Limited,' as it believes the name reflects their focus on oil and gas and is a strong brand that aligns with their business direction.
What is Kane Marshall's view on the role of oil companies in the energy transition and decarbonization?
-Kane Marshall believes that oil companies are part of the solution rather than the enemy in the energy transition and decarbonization. He emphasizes the importance of fossil fuels in creating materials for a cleaner economy and suggests that the focus should be on embracing oil and gas companies as part of the solution.
What kind of opportunities is Sasco Limited looking to target in the Australian Capital markets?
-Sasco Limited is looking to target opportunities that involve exploring for gas in deeper basins, focusing on bigger opportunities that have been overlooked by larger companies, and considering oil, gas, and potentially subsalt helium plays.
What is the current situation regarding non-payments from Blue Sky Resources after Sasco Limited's exit from the Philippines?
-Sasco Limited experienced nonpayment from Blue Sky Resources for the second transaction related to their exit from the Philippines. They are working to resolve the issue and are looking at ways to extricate themselves from Canada while keeping the company recapitalized.
What are Sasco Limited's plans for their North American leases?
-Sasco Limited is looking to rationalize their North American leases, considering Red Earth as potentially non-core and exploring bolt-on opportunities and expansions into more domestic opportunities, particularly focusing on areas with bigger upsides that can excite the market.
What specific projects is Sasco Limited currently reviewing or in discussions about?
-Sasco Limited is reviewing about three or four projects, mostly in Western Australia, with a focus on low entry point acquisitions that they can develop with their expertise and potentially promote out with like-minded juniors.
What is Kane Marshall's view on the current equity markets and energy markets, and how does he suggest Sasco Limited strategically take advantage of geopolitical issues?
-Kane Marshall views the equity markets as currently being in a 'risk-on' mode, with energy being a great space to invest in due to ongoing geopolitical tensions and the importance of energy security. He suggests that Sasco Limited should focus on getting properly capitalized and having the right projects in place to take advantage of the current market conditions.
What does Kane Marshall see as the most significant upside for investors looking at Sasco Limited?
-The most significant upside, according to Kane Marshall, is the potential for substantial growth, as the company is currently capped at a low market cap and is looking to capitalize on new projects. He believes that with the right moves, the stock could easily see an increase to a higher range, offering significant upside for investors.
Outlines
📈 Introduction to Market Open Direct Connect
The host, Stuart Walters, introduces the webinar series 'Market Open Direct Connect,' which allows companies to present their stories and investment opportunities. Managing Director Kane Marshall of Sasco Limited (ASX: SGC) will update the company's operations and engage in a Q&A session.
🌍 Update on Company Operations and Future Prospects
Kane Marshall provides an update on Sasco Limited's operations over the past six months, highlighting the company's investments in North America and the Philippines. He discusses the focus on the domestic market, particularly in natural gas, and mentions the potential impact of Middle East tensions and energy crises in Australia. The company aims to diversify its portfolio and rationalize assets, focusing on domestic opportunities.
⚖️ Strategic Initiatives and Energy Market Perspectives
Marshall addresses the challenges in Australia's energy market, emphasizing the need for reliable energy supply. He criticizes the lack of new ideas in exploration and regulatory issues affecting the industry. Sasco Limited is looking for significant opportunities in oil, gas, and potentially helium, aiming to capitalize on the current market conditions.
🔄 Transition to Founding Name and Decarbonization Views
Marshall explains the board's decision to revert to the company's founding name, Australian Oil Company Limited, to reflect its focus on oil and gas. He shares his views on decarbonization, stressing the necessity of fossil fuels in the transition to a greener economy and positioning oil companies as part of the solution rather than the problem.
💡 Strategic Opportunities and Non-Payments Issue
Marshall outlines Sasco Limited's strategic focus on acquiring and promoting new projects, particularly in Western Australia. He addresses the issue of non-payments from Blue Sky Resources after exiting the Philippines and the company's efforts to resolve this while moving forward with new ventures.
🌐 North American Leases and Future Plans
Marshall discusses the company's leases in North America, particularly the Red Earth and California assets. He mentions the need to rationalize these leases and focus on bigger opportunities that can excite the market. The company is also reviewing multiple projects, emphasizing the need for significant scale and potential.
📊 Equity Markets and Geopolitical Considerations
Marshall comments on the current equity markets, influenced by geopolitical issues like the Middle East conflict and US politics. He highlights the importance of energy security and the company's strategy to capitalize on strong market conditions by securing new projects and recapturing investor interest.
💬 Closing Remarks and Future Webinar Updates
The webinar concludes with Stuart Walters thanking attendees and summarizing key takeaways. He expresses optimism about Sasco Limited's future and looks forward to updating participants on future Direct Connect webinars. Kane Marshall also thanks the audience and emphasizes the company's efforts to recapitalize and pursue new projects.
Mindmap
Keywords
💡Market open direct
💡Sasco Limited
💡North America
💡Middle East tensions
💡Energy crisis
💡Natural gas
💡Commodity spaces
💡Australian oil company
💡Decarbonization
💡Recapitalizing
Highlights
Introduction of Kane Marshall, Managing Director of Sasco Limited, and the purpose of the webinar.
Update on the company's operations over the last six months, focusing on the completion of the need investment.
Discussion on the company's strategic shift from international assets to a more domestic focus.
Mention of the energy crisis in the east coast of Australia and the potential opportunities in the west.
Emphasis on the importance of natural gas and oil in the current market, despite the push for renewable energy.
Kane's perspective on the role of oil and gas companies in the energy transition and decarbonization efforts.
Plans for the company to return to its founding name, Australian Oil Company Limited.
Insight into the company's view on the current commodity market in Australia and its impact on strategic initiatives.
Discussion on the challenges and opportunities in the Australian energy market, particularly in Western Australia.
Mention of the company's exploration and production activities in North America, specifically in California.
Update on the non-payments from Blue Sky Resources and the company's plans to exit the Philippines.
Plans for the company's leases in North America, focusing on rationalizing the portfolio.
Discussion on potential projects under review, including onshore and offshore opportunities in Western Australia.
Kane's views on the equity markets, energy markets, and how to strategically take advantage of geopolitical issues.
Emphasis on the importance of capitalizing the company and having the right projects in the current market environment.
Final thoughts on the potential upside for investors looking to enter the market and the company's future prospects.
Transcripts
[Music]
hello and welcome to Market open direct
connect a webinar series for companies
to tell their story why it's compelling
and why it's an opportunity to invest
I'm your host Stuart Walters and we're
joined here today by the managing
director Kane Marshall of sasco limited
ASX code SGC Kane will provide a quick
update of the company's operations and
we'll also participate in a Q&A so if
you do have any questions you could
submit them via the Q a tab at the
bottom of your screen it's now time to
introduce Our Guest Kane welcome to
direct connect morning
Stuart mate firstly um can you just give
us a a an operations update uh from the
last six months but ultimately and
probably the most important question um
we have um what can what have investors
got to look forward to over the next six
months well last six months uh we've
seen the almost the completion of the
need investment so previously we had
Assets in North America and the
Philippines so Canada California and the
Philippines we' now invested our
position in in the Philippines and
really where we are now at um you know
Mar cap three or four people looking at
10 Baggers and how they can get set in
the stock and what we're doing next so
it makes sense that you previously we've
been or still are in North America um
you know we're starting to see all
markets it's sort of responding to the
Middle East Middle East tensions of the
Israel Hezbollah um unraveling or what's
going to happen there and some
structural issues around around demand
and you know potentially a risk on
sentiment with
Trump so we seeing reasonable prices in
that commodity space so red Earth um is
an asset that's worth you know s amount
of value to our shareholders but I not
convinced that that's a place we need to
necessarily be over the next six months
um California is an energy hungry State
um it's our main undertaking of our
company um gas prices there are
currently weak um structurally markets
in that part of the world a little bit
different to
Australia um and so that probably
answers the second part of your question
is where we where we going to next now
well probably allude to this a little
bit more over the next 15 minutes but um
domestically we can see what's going on
with the energy crisis in the east coast
nobody's talking about what's happening
in West in Australia we've seen a
succession of um ambiguous Andor complex
um set of drilling results in the Perth
Basin um there's a defic deficiency in
gas supply in wa we're energy hungry and
so we're looking at opportunities that
are sort of broadening diversifying our
positions in in North America to look
more domestic um that's more focused on
natural gas but secondary to that um you
know I don't think oil should be
overlooked either particularly um you
know at some point here in Australia
we're going to be uh going to have more
tensions with China we don't have a
Reliance on our own crude um and Middle
East tensions are continue to fuel um
not only the price side but we're going
to see the supply side affected so
that's what people should look to where
we're going so it's going to be a not a
pivot per se but a broading of the
portfolio to probably more domestic
Upstream
opportunities um and rationalizing the
portfolio so that's probably where we've
been and where we're going good news
what's your view on the commodity in
Australia how do you think that impacts
upon strategic initiatives that you're
trying to implement in reinvigorating
the sasco
portfolio well seeing you know both s
sides of politics wildly opposed and no
one's really addressing the issue and
the issue is Supply supply of reliable
based low electricity and we all know
commercially that uh Renewables are
deflationary that you know typically the
internal rate of returns and and rate
returns and capex is can be um well rate
of returns much lower capex probably
just as intensive so I think
government's going have to wake up to
supply issue everyone's talking about
you know what Amo has been saying what's
going on the East Coast but no one's
really talking about what's going on the
west coast we're already seeing double
digigit uh gas prices here in um Western
Australia and no new Supply um Perth Bas
is looking a lot more complicated to
deal with that and you know I think
people forget um um that some of that
Earth Bas and cast is E mark for l& so
domestic side um energ energy markets
here are strained there's no immediate
solution represent significant
opportunity for juniors in this space um
thinking outside the box and going to
areas that have um you know had
discoveries before but not necessarily
looking for the deeper gas potential so
that's you know that's for say energy
markets I think people are long gold uh
uranium copper of course and and uh and
energy so they're the commodity spaces I
think investors are looking at certainly
I am and you know this is a perfect this
this company at this kind of end of the
market is um you know I think ideally
placed to take advantage of that and
currently the company's obviously sasco
but can you tell us more a little about
why the board is ultimately looking to
go back to the founding name of the
company yeah well I think Australian or
company limit is a good name um you know
if you Google Australian or companies I
think that would be the first one that
comes up so that that's a bit of a
no-brainer I think uh you know there's
got to be some leadership in this space
you know we're an or gas company we're
not focused on biodiesel we're not um
we're not investing in solar Farms we're
not going to invest in in wind farms
we're all in gas whether people like it
or not um that's what our business is
that's what we're quoted on the exchange
for and um it sort of gives some Clues
as to where we're going we're Australian
and we're an O and gas company it
certainly makes sense and there's also a
lot been said about the energy
transition decarbonization and Net Zero
yet here you are with a name that is
contrarian to sort of everyone uh where
everyone else is going uh what are your
views on decarbonization particularly
the investment space and the
opportunities you
see well I think everyone's in favor of
a cleaner economy but at the end of the
day um if you look at
materials and what constitutes electric
vehicles and decarbonizing economy a lot
of it's coming from fossil fuels it's
coming from the products um in terms of
Roads Wheels you know all the stuff
that's required to get this stuff out of
the ground um you know the ESG theme and
a lot of the discussion around um you
know green projects well just look
what's happening in the media now
there's been 700 jobs cut from um for
skew you know I think people starting to
realize that um it's it's not it's just
a matter of to Renewables if you don't
have if you don't have crude Supply to
just you know to deliver the materials
for a green World um it doesn't make
sense um so you know as part of that you
know oil companies are the solution
they're not they're not the enemy and I
think that's why we should embrace um
contrarian view that we're an oil and
gas company and we can actually be this
part of the solution rather than cutting
us off at the knees that's not that's
not part of the solution we've had a
question coming about the portfolio what
do you think a suitable opportunity
sasco should be targeting as Niche
opportunities within this market cap in
the Australian Capital markets well I
don't think we're saying really um
globally there are issues with uh PEX
being deployed and exploration and same
in Australia no one is coming up with
new ideas they're not coming up with um
going to basins drilling deeper for gas
um building those ideas uh promoting
those ideas bringing the capital for
those ideas there's a lot of companies
uh are really looking at sort of
stranded gas developed gas smaller pools
of gas um you know I think if you want
to be big you got to think big you got
to look at bigger opportunities um look
at where the bigger companies have have
missed things also we've seen a lot of
regulatory issues in Australia over the
last few years and a lot of the bigger
companies sort of getting probably a
little bit tired of it looking at uh
abroad PNG Alaska for example SOS um and
so they've dropped the ball in terms of
looking at those bigger opportunities
here in Australia so they're the things
we're looking at we're looking at things
um oil and gas potentially subsol helium
playes um and you know one of the few
companies that's listed in in this space
looking at looking at those sorts of
opportunities can you give us an update
on what the situation is regarding the
non-payments from Blue Sky resources
after the exit from the
Philippines yeah so I think it was back
in April or May we had the second Tran
of money for Neato that um was resulted
in nonpayment um we're trying to work
through um you know what's going on red
Earth red Earth you know um we've been
producing Circ 7 800 barrels a day um
yet we not haven't really seen much
return on that project so we're sort of
looking at ways we can extricate
ourselves from Canada um and and
basically walk away with the company
reasonably recapitalized focusing on
things that investors understand I don't
think um Philippines and and Canada have
been areas that have actually done much
in terms of value for shareholders I
think was a good idea at the time and um
and so I think part of that is trying to
amicably sort that out with blue sky um
and moving into things just getting on
with life and moving on from that
relationship and can you talk to us a
little bit about North America and the
plans you might have uh for the
company's
leases yeah so North America we've got
red Earth of course are just alluded to
and and California uh you know
California gas prices have been uh weak
weaker of late I'm not entirely sure
what's driving that obviously um
supplies are you know there's a lot of
gas supply current from Canada um LNG um
exporters can turn the Taps on um but
you know Sacramento Bas and um you know
as Gary Jeff probably talked about
before is is overlooked there are bigger
opportunities I think you if you're
looking at opportunities there they're
going to get the market excited or
swinging for the fences you've got to
look at the bigger upsides so looking at
things within the portfolio and also
adjacent to those that are a
complimentary um that you know the
market can understand shareholders
prepared to put some money into the till
all that sort or we could promote out so
that's really where we are now I think
we've got to rationalize the leases that
we've got uh I think you know red Earth
could probably be considered as non core
it's got value so we make sense to to
devest that um so I think it's more
bolt-on opportunity and then expanding
the portfolio into more domestic
opportunities another one's com in
around specific projects um on what you
can say is have you got any specific
projects under review or currently in
discussions yeah we've got a probably
about three or four projects at the
moment that we've been looking at so
it's a combination of onshore offshore
uh mostly in Western Australia um low
entry point acquisitions
things that we would pick up with our
expertise uh could bring another
like-minded Juniors and promote out so
we're well down the path of at least one
and then there's at least another
another one that we're probably Fairway
down the path with and there's another
couple we're looking at to see if theyve
really got scale when I say scale
they've got to be you know onshore you
know got to be 10 million barrels or you
know 00 BCF so we're not really looking
at things that are you know two or three
BCF onore because of the cost reg
regular cost you really got to be
looking at the big upside and um
something the punter is
like uh there's not been much more com
in but there's another one here say your
view on the equity markets um energy
markets and how you would strategically
take advantage of any geopolitical
issues yeah I think Equity Mark is kind
of tied with what's going geopolitically
I don't really need to go on about
what's happened in in uh us with Trump
but you know I think Equity markets are
risk on
um don't think there's you know he's
going to obviously want to do a deal in
Ukraine we can see the Middle East
conflict so I think it's going to be
you're going to see Equity markets
probably continue to perform to be
strong energy is a great space to be in
um you know we've suffered here for a
long time in this space particular down
the center of the market of just not
being able to raise money um get
projects mean that are that meaningful
so really um markets are strong but
they're not going to be like that
forever so it's really I think about the
next six months of getting this company
properly capitalized uh and having the
right projects and you know everyone all
the major economies are facing elections
a little bit of uncertainty but I think
um you know with Trump RIS gone um you
know we're still inflationary
inflationary mode given we're
inflationary and energy is a big
component of that um you know
governments have to do something about
energy security so it's a great time to
be sort of investing this space yeah and
just to elaborate on that a little bit
more what's what do you is the most
significant upside um for anybody
looking to come
in well the upside is why everyone
invest we capped at three and everyone's
looking for 10 Baggers and decent
projects and you know who are the board
and management to take it forward so you
know really you know when you go on the
road and you see people the first thing
they ask okay what's your market cap and
what are you doing well Market Cap's
three or four we've got some money
looking to rec capitalize the company
move new project so really on not much
news you can really easily see the stock
back in a one or two cent range um and
then you know then you get some
liquidity back in the stock it's easy to
actually do things so that's that's what
I think people be looking at is you know
if you look at Who's down this end of
the market and what they're doing there
aren't really too many you can probably
count them on one hand um and of those
who you know which of them have got
problems and I'd say I'd argue that we
don't really have that many problems
we're just you know we're in a process
of recapitalizing the getting new
projects so really you can get set now
and it's probably nothing but upside if
I'm honest okay great to hear um that's
all that's come in today so thank you to
everyone for attending today's webinar
certainly a lot of great information
there and a lot of key takeaways I'll
keep you updated for any future Direct
Connect webinar opportunities Kane
thanks for your time today I know you're
working hard in the background mate so
wishing you all the very best and look
forward to chatting again soon no
problem thanks G
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