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The Company Revolutionising The Gas Industry
BY SAM GREEN - 14/07/2017 | VIEW MORE ARTICLES BY TRADERS CIRCLE

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SOP - SML CORPORATION LIMITED


When you extract gas for sale, you need to quantify exactly how much gas you have actually extracted, so that you can send an accurate invoice to your customers. Whilst this sounds very simple, it is actually a very complex process that is conducted in laboratories, and usually takes weeks.

That is weeks of funding a laboratory and paying scientists to conduct the tests, and weeks of paying for encumbered gas tankers to sit in port.

In fact, at large production facilities it can take a stack of time, and hundreds of thousands of dollars, to quantify and verify how much gas is being shipped out in each consignment.

That is, until now.

A small Australian engineering firm, specialising in highly complex engineering consulting, has developed a system that is making the existing processes redundant.

The system, developed by Synertec Corporation Limited, is a gas custody transfer system that is instantaneous, has superior accuracy, and is already saving gas extractors millions of dollars. The system has now been installed at Australia’s largest liquefied natural gas production facilities (being the Gorgon and Wheatstone facilities).

Synertec can make millions in profit from installing one of these systems, as can their customers. With a potential market of more than 200 LNG terminals worldwide, there is a huge potential profit opportunity with this best-practice technology. And this is just one facet of Synertec’s business.

Synertec also provides engineering and consulting services to a wide array of customers. Most of their customers are large international businesses, or major institutions. They have worked with names like Carlton United Breweries, CSL, Chevron, the CSIRO and ConocoPhillips; and those are just some of their customers starting with “C”.

The company generated around $1million in profit after tax in the 6 months to December 2016. It is poised to be acquired by listed firm SML Corporation (SOP.ASX) for $AU10 Million.

SML Corporation is a bit of an enigma; it has historically focused its business activities in gold and base metal exploration. However, they are wrapping up these operations, leaving them with very little expenses and valuable tenements, which they are preparing for sale. They also have a substantial cash position, and no significant liabilities.

It is not often that you see a firm with negligible liabilities and net assets of over $AU11 million trade at a market capitalisation of less than half that. But that is the case with SML Corporation.

Whilst SML Corporation’s market capitalisation may be low, the company is actually flush with cash, and has no substantial debt. Indeed, the company can practically buy all outstanding shares with its cash and equivalents at the current share price.

SML Corporation is conducting a relatively small issue of $750,000 to help cover the costs and expenses of the Synertec acquisition, and will assume the Synertec name on completion. If you are interested in taking a slice of this pie for yourself, please do not hesitate to contact an Advisor on (03) 8080 5795 or visit: http://www.ozfinancial.com.au/LP/SMLProspectus.aspx to download a prospectus.




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TradersCircle is one of Australia's leading stock market education firms, and runs one of the country's busiest options trading desks. Learn more at www.traderscircle.com.au.


 

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