P&NG Capital Ltd. Is all about Energy Partnerships & Capital Ideas. Through its subsidiary P&NG Technology A Solutions Technology Company we help leaders transform their businesses where it matters. P&NG’s business is the development and implementation of innovative cost-effective natural gas & natural gas liquids proprietary storage systems to create very large value chain optimization opportunities. P&NG’s energy storage innovation focus encompasses patents, patent applications and trademarks.
Tell us about yourself?
Our founder Jeff Rekunyk a passionate entrepreneur for everything energy who developed our IP and as former CEO of a small cap TSX listed E&P he founded, that was sold to Brookfield Asset Management, is a uniquely qualified energy expert and consultant with 25 years experience in all aspects of energy and energy infrastructure to lead this company.
The CEO Jeff Rekunyk is a member of The Association of Professional Engineers and Geoscientists of Alberta Canada with capital market experience since 2000 advising through P&NG’s consulting and advisory business whose strategies and tactics use scope and scale analysis with deep understanding in geology, production, engineering, facilities, project management and construction to large assets with optimization strategies to equally large platforms, capturing synergies and playing the same game as corporations, only with a higher bar through innovation.
P&NG continues to hone its approaches to creating value in partnership with the C suite, investors, boards and stakeholders for the past 10 years. Given current asset prices, rapidly changing markets, and the need in many cases to transform the value of assets and acquired assets, few management teams are prepared to take on all the challenges.
If you could go back in time a year or two, what piece of advice would you give yourself?
Don’t think you have everything figured out and while you are getting yourself out there the product description will evolve as you compare your product to the status quo. It is incredibly difficult to get people to look beyond the status quo which turns out is the most powerful force in the universe.
Figure out your number, every business has one. Turns out ours is 1, one decent size customer will create inbound customers, so stop chasing the little guys, they take just as much if not more effort, as a larger client which will be a game changer.
What problem does your business solve?
Being a price taker. Natural Gas Markets and natural gas liquids “NGLs” are a cyclical physical (volatile) system – Natural Gas & NGL storage is the only mechanism for overcoming weak price cycles to capture fair value vs a price taker constantly selling into any market, or the reverse if you are a industrial user or power generator.
What is the inspiration behind your business?
Upstream producers constraints to receiving better prices – limited storage capacity – no commercial (cost-effective) access to natural gas or NGL storage for producers, to allow markets to clear without going to zero.
Producers receive 29 to 49 per cent of revenue, transporters and marketers receive 36 to 62 per cent and considering the producers risk profile compared to marketers and midstream company’s this is not a healthy overall market.
What is your magic sauce?
The most advanced commercially available storage technology for storing both Natural Gas & NGLs effectively – P&NG Combined Natural Gas & NGL Storage Delivers – “A Disruptive Ability To Store & Deliver Large Natural Gas & Natural Gas Liquid Volumes”.
An IP Process Technology Solutions for Upstream which results in enhanced oil recovery “EOR” and Midstream to provide a disruptive ability to store NGLs with Measurement & Analytical Application Software Solutions for EOR & price optimization from seasonal price swings without derivatives (a zero-sum trade).
Our unique IP solution licensing fee is a rounding error in the project economics and as a long-term fee, creates the ability to provide our clients custom financial solutions especially NOC’s to fund infrastructure and facility improvements that are extremely accretive to our clients and P&NG.
What is the plan for the next 5 years? What do you want to achieve?
Our objective is operate a globally diversified portfolio of high-quality energy innovation focus patents, patent applications and trademark assets that will generate sustainable and growing distributions over the long term for our shareholders.
A Business model that turns low Licensing Fees into rich returns with a stretch target by full year 5 to generate $40 million per year in revenue with a DISTRIBUTION PROFILE 40% of EBITDA – Implied Yield 19% and a target annual growth 5 – 10% thereafter.
The vision is the “Market Need” for non-integrated Upstream companies dependent on Mid and Downstream Merchant storage solutions which are sub-optimal for Upstream Producers. The Company solutions allows Upstream and Midstream companies to simultaneously Sell, Buy, Store and Enhance oil and liquids recovery with their Natural Gas and NGLs resources.
What is the biggest challenge you’ve faced so far?
The challenge every start-up company faces a lack of working capital to get out to the market participants more time effectively and with greater reach.
We have developed and used a strategic relationship recently with an engineering, procurement and construction “EPC” company which would build our system for the client if they win the bid to try an expand our reach.
We have been getting some serious potential traction in a Country they had grown some contacts, however the EPC relationship is trying to subordinate us and not following standard protocol with their CA Agreement with us. They are conflating what they do, which second and separate from what we do, which is first and then we send them the engineering requirements and they will have their people design (they bring people to the table not the IP or system like we do). It is seriously jeopardizing a game changer client for us and them, and we look disorganised and unprofessional because of the EPC CEO’s control issues.
How do people get involved/buy into your vision?
The potential is enormous in North America and thereafter or in conjunction around the globe we need people with deep contacts at high levels in governments, the petroleum and natural gas business and LNG buyers globally including but not limited to power generators and utilities in Europe, Asia and globally. We also seek people with deep financial contacts in institutional funds and capital markets as the projects often require a capital stack with top tier counter party(s) hat will issue investment grade notes and best in class assets funding opportunities with long term taker-pay contracts to build greenfield and brownfield storage facilities.
Our business model does not require on going funding. For the right group or person we would entertain selling a stake in the Technology company on mutually accretive terms.