Luis Iglesias

Debunking the Myths-Unveiling the Truth about Clean Energy 1. The levelized cost of energy, for wind, and solar costs are claimed to be low based on LCOE. However, LCOE is not an accurate measure of costs, as it does not include land, the cost of new transmission lines to send the energy where the power is needed, or the costs of batteries for large-scale storage.  https://lnkd.in/eN6jA2sr 2. While California's solar and wind projects are growing, their energy output is a small fraction of global demand. In 2023, wind & solar contributed a mere 6.48 exajoules worldwide, just over 1% of global energy needs. Fossil fuels continue to meet 80% of the world's energy demands. 3. Furthermore, California has the highest energy cost for consumers in the US. Does that make you want more wind and solar? https://lnkd.in/gssJ3abe 4. The efficiency gap between gas and wind turbines raises questions: Gas turbines have a 60% power efficiency & require only 30 tons of steel/copper per megawatt to build, while wind turbines have realizable capacities of 20% to 33%, and use 500 tons of steel/copper/lithium per megawatt. [Per Vaclav Smil's 2024 report on Achieving Net Zero.]. 5. The media announces wind and Solar projects in press releases as their gross capacities, say 10GW, meaning 10 Gigawatts. But those are gross capacities that far more than the power realized from wind or solar. The best solar farms in the US produce about 35% to 40% of their capacities in realized power, and wind produces less, averaging 32% in the US, 20% in most of Europe. This is another false narrative.   6. FERC Rule 1920 requires coal plants owned by utilities to meet emissions requirements or go out of business. It forces utilities to do renewable energy projects, and either convert the plant to nuclear or create new wind and solar projects. Unelected bureaucrats established this rule. It fits Biden's style of Executive Orders, ruling without legislative approval. US citizens should be able have a say in that. https://lnkd.in/gXSMRY8M 7. Germany has tried to replace Russian gas with renewable energy, closing down its nuclear plants. But it has the highest electricity prices in Europe, & show signs of de-industrializing. https://lnkd.in/gYRU6b6T My group on Electricity Generation Worldwide, https://lnkd.in/graRy4uz

Natural Gas Equity Volatility Mispricing, an Update How can one value NG Equities using Traditional Metrics like FCF Yield or EV/EBITDA? You can't When comparing two NG companies with different Inventory Durations and Sensitivity to NG Price changes, altering the FCF Yield or EV/EBITDA multiples arbitrarily is a flawed strategy The core issue is that using FCF or EV/EBITDA assumes that the relationship between Equity Price & the NG Curve is linear or symmetric, which is never the case. NG Equities behave like NG Options, where volatility and commodity sensitivity play a critical role in valuation The attached is, CurveAlpha's Equal Weight NG Equity Index, Priced as a Series of Equivalent NG Options. Chart serves as a “sanity check” If you're a NG or Oil Producer, reach out, and we can explain how this Index is built or how we generate a similar picture for an individual E&P Assets A Few Key Observations: *FCF Yield or EV/EBITDA multiples can have a very different Options-Based Valuation. Wouldn't you want to know why and when this divergence happens? *The NG Index is back at fair value @100% (from a 20% discount in August). It doesn’t tend to stay at this level for long. Traditional Metrics disguise or ignore the exposure of E&P companies to volatility, leading to frequent mispricings *Dispersion within the NG index can easily be 30%. This is logical, as the market struggles to handicap the difference in FCF vs the Options to Drill difference M&A, Buybacks, or other Strategic E&P Transactions based solely on Traditional Valuation Metrics carry substantial mispricing risks We noted in August, that if you're selling NG assets, it might be wise to stall, as odds of better relative pricing was high. Conversely, if you were a buyer, we recommended to act with urgency as the asymmetry of probable NG volatility was very much in your favor We understand that not all NG assets are created equal—some assets are wagers on LNG, others on Power Demand, and others on NGLs. Regardless, you need to start by pricing the Options to Drill for NG. CurveAlpha makes it simple by running options pricing models nightly on approximately 150,000 drilling locations. We use our data or yours to provide a comprehensive view of an E&P company’s volatility exposure and value its assets accordingly. Conclusion: E&P Investing is an Options Pricing Game. NG especially so. Buying or selling NG assets purely based on FCF Yield or EV/EBITDA without considering volatility is a losing proposition unless price volatility is zero. When evaluating companies like EQT, CHK, AR, CTRA, RRC, CNX, CRK do you have confidence in your valuation comparisons? [email protected] http://www.curvealpha.com/    #EOG #OXY #FANG #APA #COP #CVX #XOM  #BP #TTE #SHEL #SU #CNQ #CVE #DVN #MUR  #EQT #CHK #AR #OVV #PR #CTRA #RRC #SWN #NOG #Raisa #Aethon  #SD #MTDR #CRGY #SLB #BH #HAL #SM #CIVI #CRK #CNX #BRY #CRC #DiversifiedEnergy #SankeyResearch #Super-Spiked #Veriten