News blog
Spitfire Oil Ltd
- BY: Andrew Hore |
- POSTED: 12/01/2009 |
Shares in Spitfire Oil Ltd trebled after it said that it had produced the first oil from its new test reactor.
The shares increased 17p to 25p each, valuing Spitfire at £10.6m. That is good news for Griffin Mining, which acquired Citadel Equity Fund’s 39.2% stake in Spitfire for £2.5m. That was at 15p a share, compared with Citadel’s buying price of 60p a share in July 2007
Coal to liquid technology developer Spitfire has a lignite deposit in Western Australia with a current resource deposit of 500m tonnes – equivalent to 200m barrels of oil over 25 years.
This test is the first step towards showing that Spitfire could produce up to 20,000 barrels of oil a day from its lignite. A lot can happen when the technology is scaled up so there is no certainty that it will work efficiently. There are a number of potential problems including the amount of water in the lignite and optimising processing.
It will cost A$1.3bn to complete development and get the plant up and running. Spitfire’s process generates one-quarter of the emissions as the standard process.
The breakeven oil price, including a 9% return on capital invested, is estimated to be $40 per barrel. The operational cost is $18 per barrel.
Spitfire had cash of A$14.1m at the end of June 2008.
© 2024 Aim Micro. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
- Browse by issue
- All issues
- Popular tags
- All tags
- AIM Micro feeds
Keep up to date with articles published at AIMMicro.com. Subscribe to AIM Micro RSS Feeds
|