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Xebec $113.5M CCS order +3

17:50 12-Apr-22


Xebec has announced the order that it tipped ahead of its investor day, valuing the 51 CO2 compressors at $113.5M.  The press release does not reiterate the 3Q23 delivery completion, nor do I see approval of the project.  However, Biden is waiving ethanol restrictions, and this project will probably move forward as an attempt to greenwash such bad energy policy.  Hopefully the technology will be proven and eventually put to better use.

Regardless of the real world implications, this supports my price targets for XEBEF.  The rebate rate remains well above 20% meaning a short squeeze could easily move the stock price toward my $8.50 aspirational target at least temporarily.  Even without that, my $2.20 current fair value still represents almost 30% upside.