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May 23rd, 2015

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Opportune Time for Oil & Gas Exposure
Stephan Bogner  May 21  

Oil Market Update
Clive Maund  May 06  

Innovation and Efficiency Drive U.S. Oil Supply and Demand
Frank Holmes  Apr 01  

Oil Market Update
Clive Maund  Mar 29  

Still Another Update on Oil
Ferdinand E. Banks  Mar 24  

»» more editorials in the archives

market data


Ux U3O8 Price (Uranium)May 4th, 2015
$35.75 -$2.50 www.uxc.com

»View Commitment of Traders.

expert analysis & newsletter briefs

Royal Dutch Shell Plc

"Royal Dutch Shell Plc recently announced a merger with BG Group Plc to create the world's largest liquefied natural gas company and second largest energy company. The value of the stock transaction is ~$70B, or a 52% premium versus 3040% historically, based on a 30-day average." (5/18/15) - Fadel Gheit, Oppenheimer & Co.

Mart Resources Inc.

"Mart Resources Inc.'s share of oil produced at Umusadege in Nigeria over Q1/15 was 8,785 bbl/d. . .cash flows from operating activities were an inflow of $17.9M. . .operations have commenced on the UMU-8 well site to sidetrack and deepen the existing UMU-8 well." (5/18/15) - FirstEnergy Capital

Galaxy Resources Ltd.

"Galaxy Resources Ltd. is advancing plans to develop the Sal de Vida lithium and potash brine project. . .the company has entered into an operating and option agreement with a third party for its Mt. Cattlin mine, which had been on care and maintenance since early 2013. Under this agreement, Galaxy will receive lease fee and royalty income." (5/15/15) - Peter Chilton, Edison Investment Research

Galaxy Resources Ltd.

"Galaxy Resources Ltd. is advancing plans to develop the Sal de Vida lithium and potash brine project. . .the company has entered into an operating and option agreement with a third party for its Mt. Cattlin mine, which had been on care and maintenance since early 2013. Under this agreement, Galaxy will receive lease fee and royalty income." (5/15/15) - Peter Chilton, Edison Investment Research

Energy Fuels Inc.

"Energy Fuels Inc. announced its financial and operating results for Q1/15. Revenue of $7.6M was well below our $14.4M estimate due to the timing of uranium pounds. . .we believe that the acquisition of Uranerz Energy Corp. will close this summer and that post closing Energy Fuels will outline an expansion strategy for the acquired assets. . .the acquisition is key to the company's future potential as it provides both additional contracts and low-cost in-situ recovery production. . .Energy Fuels has significant growth potential if uranium prices were to recover significantly. Thus, we are maintaining our Buy rating and $11 price target." (5/12/15) - Joe Reagor, ROTH Capital Partners


featured companies

Jericho Oil Corporation (TSX-V:JCO)
Exploration of legacy basins across North America
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Quantum Energy (QEGY.PK:OTC)
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The Energy Report ()
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Torchlight Energy (NASDAQ: TRCH)
Oil Drilling and Working Interest in Oil Projects
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from the publisher
  Robert J. Moriarty

Welcome to 321energy.



Tesla Could Be Changing The Dynamics Of Global Energy


Michael McDonald
admin@Oilprice.com
http://oilprice.com/
April 30th, 2015

Tesla's announcement last week about creating a new line of batteries for use by businesses, consumers, and the electrical grid at large is a game-changer for the industry. Currently, when individuals or companies need back-up power, they usually rely on generators. Effective battery storage for large amounts of energy would be a game changer in that it would enable a separation of generation and use of energy produced through clean fuels like solar and wind power.

The big problem with solar and wind right now is that the energy is only useful when it is actually produced and, because a company cannot modify generation to correspond with demand needs, any excess power has to be sold back to the market for immediate use. Tesla's new batteries could go a long way towards solving this problem. It is likely that Solar City, for example, would be very interested in any home application for large scale battery technology.

The unique differentiator here is not necessarily Tesla's technology. The company certainly has state of the art tech, but what might make battery production feasible is the economies of scale that Tesla is looking to capture in battery production. Tesla's new gigafactory will be an enormous production facility when it is completed and the facility should be able to produce 50 GWh of annual battery production eventually. This level of production should enable mass production of batteries at a fraction of the current cost.

But beyond Tesla, these economies of scale could also have benefits for other firms in the same industry. To the extent that Tesla's production capabilities create new demand for component parts, the result would be lower costs for inputs in batteries. As supply costs fall, battery production costs across the industry would fall also leading to increased quantity demanded by consumers and businesses.

Put differently, when Edison invented the light bulb, the standard method for producing vase shaped glass vessels was very different than what it is today. Producing a vase by traditional glass blowing is expensive and time consuming. So if a person had to make just one or two light bulbs, it would likely take hours of work. Once millions of light bulbs are needed, the process becomes industrialized and the cost per bulb falls to pennies. The same principle applies to the economics of battery production, and that already has even competing producers salivating.

Batteries already may be much more profitable than most people realize, and so if Tesla can open up new markets for its products, it could drive the company's earnings dramatically higher. The exact level of profit will depend on many different factors of course, but assuming that Tesla can sell its batteries based on charge capacity, then the profits could be astronomical. Tesla recently increased the price on some of its vehicles by $4,000 in concert with a 10KWh increase in battery capacity.

This implies that the company thinks 1KWh of battery capacity is worth roughly $400. 1 GWh is equal to 1 million KWh and Tesla's new factory should be able to produce 50 GWh annually when at full production. This would, in turn, imply $20B in annual revenue from output produced by the factory. Of course this value will vary dramatically based on many factors including battery size and usage, but the raw figures are mind-boggling nonetheless and suggest the magnitude of the market potential here. Even if Tesla ultimately ends up selling battery capacity for one-tenth this amount, then the result would still be a huge boost to the company's bottom line.


Michael McDonald
admin@Oilprice.com
http://oilprice.com/
April 30th, 2015



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