Portland Gas plc the gas storage project development company today announces the commencement of dealings in its shares on AIM following completion of the demerger from New Egdon (renamed Egdon Resources plc) which is also admitted to trading on AIM today.

Seymour Pierce Limited is the Nominated Adviser and Broker and NM Rothschild and Sons are financial advisors to Portland Gas.

Overview of Portland

Portland's business focuses on the development of gas storage projects in the United Kingdom and internationally. It currently has two projects in its portfolio, the first an advanced Project at the Isle of Portland which has been under development for over 3 years, and the second the Larne Lough project in Northern Ireland which was announced in July 2007.

The Isle of Portland project is seeking to develop a major gas storage facility, with the creation of 14 underground storage caverns totaling 1000 mcm (35 bcf) of natural gas - equating to 1% of the UK's annual demand.

Portland Gas has drilled and successfully appraised the salt sequence at Portland and is currently progressing through the planning, financing and tendering for construction processes. The planning application decision is expected to be made during the first quarter of 2008.

The Company is currently evaluating the potential of a Permian salt sequence in the Larne area of Northern Ireland to create salt gas storage caverns. The Company has commenced an Environmental Impact Assessment for the proposed project and has also acquired a 3D seismic programme during October and November 2007 to define the distribution and thickness of the salt within the area of interest. It is anticipated that the results of the seismic programme will be known later in the first quarter 2008.

Portland Gas plc will be led by Andrew Hindle as Chief Executive Officer with Craig Gouws (Chief Financial Officer), Walter Roberts (Legal and Commercial Director), Kenneth Ratcliff (Non-Executive Chairman), Mark Abbott (Non-Executive Director), and Maurice Hazzard (Non-Executive Director) comprising the Board.

Upon admission there will be 67,801,840 ordinary shares in issue.

Commenting on the listing of Portland Gas on AIM, Andrew Hindle, Chief Executive Officer of Portland said: 'Portland Gas has developed a significant presence in the UK energy industry over the past 3 years, and our strategy to develop the Portland project has led to significant shareholder value creation in this time.

'The Company is delighted to be admitted to AIM, following our demerger from Egdon, and we look forward to developing our portfolio of projects in the UK and internationally over the coming years in a sector that is rapidly becoming an important element of UK energy security.'

As a personal note, if the Isle of Portland project is given the go-ahead I wouldn't be surprised to see this rise by at least 50%.

Or by this afternoon...by golly !

It's dropped back down now, I'm guessing a result of short-term profit taking. But I think there's a lot left in the tank for PTG :-)

A bit of profit taking today but still comfortably above 4. Good times at Portland Gas :-)

Yes....., I would say a bit of a market shake here, I'm still in...more good news to come...!.

This is extremely encouraging as the Directors obviously feel there's a lot more to come from PTG:

The Company announces that the Directors below chose to accept the issue to them, or their nominees, of fully paid ordinary shares in the Company in lieu of cash bonuses that otherwise fell due for payment on 24 May 2008. The number of shares so issued and the resultant new beneficial holdings held by the Directors are as follows:

Director
Shares Issued
New Total Beneficial Holding
Percentage of Issued Share Capital

Mark Abbott
2,860
6,687,666
9.86%

Maurice Hazzard
1,144
1,144
<0.01%

Andrew Hindle
22,885
6,617,117
9.75%

Kenneth Ratcliff
4,577
53,000
0.08%

Walter Roberts
16,210
1,042,960
1.54%

The issue price of these shares was 409p (being the middle-market closing price on 23 May 2008, the last trading day before the bonuses were otherwise payable). Application has been made for the new shares to be admitted to trading on AIM with dealings expected to commence on 2 June 2008.

Immediately following the issue of these shares, the total issued ordinary share capital of the Company will be 67,849,516 Ordinary 10p shares.

Anyone got an idea of what this company is worth? Cushion gas appears to be increasing in price making previous valuations of around 5.5 conservative, but I am no expert. My broker is talking it up to a takeover price of 8.50. Anyone else share this view?

Well there was an article in Shares a couple of weeks ago which quoted an analyst who had slapped a sell rating on PTG with a target price of 2. Personally I think that's ludicrous with today's energy market, especially as approval for the Portland project was given. But then I don't earn a large 6-figure sum so what do I know?

More faith in PTG's future from the Board:

Portland Gas has been informed that Director Craig Gouws today purchased 7,530 ordinary shares in the Company at a price of 383p each. Mr. Gouws is now the beneficial owner of 20,000 ordinary shares, representing 0.03% of the current issued share capital.

Whilst Seymour Pierce reiterates buy Portland Gas (PTG), with a 570p target.

Can anyone throw some light on the likelihood of a full bid, spin off or farm in? I last looked at this company some months ago with a follow up diary note around this time to coincide with the aim to complete a farm in by late summer. I have heard nothing and read only speculation in ft recently.

Over the summer the company has raised money at 3.55. Does that mean that negotiations have been disappointing?
Or have projected costs of 500M increased?
Or are they buying time to extract a better price?
I see that a relatively unknown broker recommends a sell with a target price of 2.00- any views?

I still have shares and see this company as outperform. The sector looks hot and the company has a number of other projects to realise growth in the future.

There's a longish article (including these) in the FT today, you might find it of interest h123.

All very quiet here. An announcement due on 10th October or thereabouts. Apparently management is keeping qt, which probably means they are going to row their own boat rather than do the best thing for those of us who invested for the first stage i.e planning permission and then a sale of 50% to a joint venture partner.
Quote
"Seymour Pierce reiterated its 'buy' stance and NAV of 498p for shares in underground gas storage facility developer Portland Gas (PTG), saying that Centricas recent acquisition of the depleted Caythorpe gas field provides a good indication as to the current industry valuation of UK onshore gas storage projects: "this deal reinforces our view that Portland Gas is substantially undervalued." The broker's NAV of 350 million pounds (498p per share) is derived from a DCF (discounted cash flow) analysis of the Isle of Portland project, which values the asset at 340 million pounds, and the company's net cash pile of 10 million pounds. "We anticipate further positive news in the near term and expect that the current discount to our NAV will progressively unwind," it added. Portland Gas shares finished 17p ahead at 253p."

Any views?

No views at present. Shares Mag seems downbeat on PTG at present but I'm waiting until 10th October to get a clearer view.

Are we sure it's the 10th, I think they said around the 10th, so maybe tomorrow.

Anyone got a view on this company? Andrew Hindle appears to have it all wrong. Where is the funding in the current market and at what price for a small bunch of entrepreneurs with nothing to add apart from planning permission. Surely the project should be sold lock stock and barrel to a major in the sector who can fund it over time from internal resources.This would give current shareholders the best return with future upside from other projects in early stages eg Larne.The problem with small timers trying to be big timers is ego, and I think AH has it in spades. IMHO.

Very interesting sector and some very uninteresting Companies in it...including this one IMHO.

19 Dec08, - RNS - - just what has this Director bought?
Some clarity would give the impression this company might be going places.
-As it is, the sp did touch 4 and is now a member of the 90% club, in a few months.....and with the current squeeze on cash, unlikely to get funding for any further improvement . . . . 20p soon?
-OR- Better to sell-out......but not to Elgon - they've sunk without a whimper, er IMHO.