Friday, November 17, 2017 2:33:28 PM
Respectfully, this just isn't how things work.
On the supply side, there are typically two kinds of contracts - short-term spot agreements, that go month-to-month, and long-term take-or-pay agreements.
There are a variety of crude suppliers that range from non-integrated "aggregators," that purchase minimally processed crude from small producers, to vertically integrated producers, like Exxon-Mobil, etc. The small aggregators will enter into agreements on three to six month contracts to provide crude, generally at a higher price, and not including transportation fees. This would force a refiner like MMEX to pay more for feedstock, further negatively impacting its margins by reduction in the crack spread.
It is less likely that a crude supplier or mid-stream entity would enter into a take-or-pay contract with an entity that has no track record, like MMEX. It would be risky, and bad for business on both sides. If MMEX can't pay for whatever reason, they have a potential contract lawsuit on their hands, including arbitration and other delays. What motivation would a supplier have in entering a long-term contract with an unproven customer, with insufficient (or no) financing?
The same issues surround off-take agreements - no end customer would tie their hands to something like MMEX because it creates both supply risk for them, and financial exposure.
Providers of project finance understand these issues, and look carefully at the viability of everyone in the chain, from supplier, through refiner, to the off-take customer (or customers). They generally expect multiple solid supplier relationships (to reduce supply disruption risk), and multiple solid off-take customers (to reduce off-take disruption risk).
Anybody looking at MMEX (if in fact anyone is) would run from this toxic blob - there is simply so much wrong with it, even a high-risk profile investor, or rank amateur financing syndicate can see it. MMEX just stinks.
Recent MMEX News
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 09/16/2024 05:21:55 PM
- Form DEF 14C - Other definitive information statements • Edgar (US Regulatory) • 09/06/2024 01:41:32 PM
- Form 10-K/A - Annual report [Section 13 and 15(d), not S-K Item 405]: [Amend] • Edgar (US Regulatory) • 07/30/2024 02:08:15 PM
- Form 10-K - Annual report [Section 13 and 15(d), not S-K Item 405] • Edgar (US Regulatory) • 07/29/2024 04:55:42 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 02/05/2024 09:51:51 PM
- Form SC 13G - Statement of acquisition of beneficial ownership by individuals • Edgar (US Regulatory) • 01/03/2024 01:18:51 PM
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 12/14/2023 03:11:12 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 10/06/2023 04:48:44 PM
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