Aug. 13 at 7:48 PM
$NEXT Something Schatzman said on the Q2 call that I haven't seen a single analyst pick up on...
He floated the idea of buying back equity interest in Phase 1 from their own partners. Not selling down — buying up. Think about what that means. Right now NEXT gets 20.8% of Phase 1 cash flows while GIP, TotalEnergies, GIC, and Mubadala take the other 79.2%. Those partners came in when NEXT needed capital and construction risk was real. That risk is almost gone now. Train 1 is 74% complete with gas going in the facility this year. The asset these partners bought into at a discount to de-risk NEXT is about to start printing cash.
A 5% buyback of Phase 1 interest costs ~
$600–800M at fair value. In return you get ~
$180–240M in additional annual distributable cash flow at current margins. On 264M shares that's ~ a 1$ of annual cash flow per share that simply didn't exist before. At a 15x multiple, you've just created
$10–14 of share price on top of the current price, that NOBODY's model has.
