EXR's project is on the border of the clean-energy hungry China, seeking transitions to cleaner, nearby energy sources.
Last Price:
Date of Initial Coverage
11-Jul-19
Initial Entry Price
$0.041
Returns from Initial Entry
193%
EXR to achieve a $1BN market cap through successfully advancing one or more of its three projects: its Mongolia gas project, Mongolia green hydrogen project, and/or its Queensland gas project.
Opened: 10-Mar-2022
Shares Held at Open: 3,500,000
Elixir Energy (ASX:EXR) is looking to build out a clean-energy producing hub consisting of Coal Seam Gas and Green Hydrogen in southern Mongolia, bordering China.
Decarbonisation via natural gas energy production and green hydrogen technology. As the world looks to cut greenhouse gas emissions, gas and green hydrogen may prove to be major building blocks towards a net zero economy.
Strategic location in Mongolia
EXR's project is on the border of the clean-energy hungry China, seeking transitions to cleaner, nearby energy sources.
Strong board & management team
A history of success in coal seam gas.
Green-Hydrogen potential
A research report indicated a strong base for a potential Green-Hydrogen project over EXR’s Nomgon PSC.
Fully funded exploration
Drilling planned across giant landholding seeking to open up new sub-basins and add to existing prospective gas resource.
Strong balance sheet
EXR’s $28.4M in cash (at 31/12/2021) can fund its existing business lines for the indefinite future, plus allows for potential acquisitions.
Objective #1: Pilot production program at the gas project
Design, costings, and permitting leading to a maiden pilot production program this year.
Objective #2: Exploration drilling
In addition to the pilot production program, Elixir will continue its exploration program across the Nomgon PSC, with ~20 wells planned for 2022.
Objective #3: Evaluate the Commercial Viability of a Hydrogen Project
Production risk
EXR is drilling for “Coal Seam Gas”. There is a risk that while there are gas shows, they may not be commercially extractable. CSG gas is more complex in nature as compared to conventional gas deposits.
Commercial risk
Green hydrogen project economics depend on governments putting in place mechanisms to support net zero goals.
Geographic risk
There is country-risk. Any political instability might put the production sharing contract at risk.
We have been holding EXR since 2019, while we free carried and took profit during 2020 and 2021, we recently added to our position on market at 16.5c.
Our plan with EXR is to hold to see the company achieve our 2022 objectives, but will look to de-risk our position by selling 20% if the share price significantly re-rates on achieving our 2022 objectives OR based on the strong macro theme of global gas shortages and green energy.
Disclosure: The authors of this article and owners of Next Investors, S3 Consortium Pty Ltd, and associated entities, own 3,500,000 EXR shares at the time of publication. S3 Consortium Pty Ltd has been engaged by EXR to share our commentary and opinion on the progress of our investment in EXR over time.
✅ Initial Investment: @4.2c
✅ Top Slice
✅ Free Carry
✅ Increase Investment: @2.6c
✅ Free Carry
✅ Increase Investment: @13c
✅ Free Carry
✅ Increase Investment: @16.5c
✅ Free Carry
✅ Take Profit
✅ Price increases 300% from initial entry
✅ Price increases 500% from initial entry
✅ Price increases 1000% from initial entry
✅ 12 Month Capital Gain Discount
✅ Free Carry
✅ Take Some Profit
✅ Hold remaining Position for next 2+ years
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