K E V 8 4

Cont'd 3 of 3 Bull and Bear Cases

### The Bull Case (Why It Could Rebound Strongly)
- **Assets are massively undervalued relative to invested capital** — The company has poured ~$43B+ into facilities (Calcasieu Pass fully operational, Plaquemines nearly complete with 34+ trains producing and final blocks in commissioning). At a ~$15B market cap, you're essentially buying world-class LNG infrastructure at ~0.35x book value. If execution delivers and disputes resolve favorably, this discount could close dramatically.
- **Ramp-up at Plaquemines is progressing** — Recent filings show the plant is ~99% constructed, with commissioning cargoes funding the final push. Management guides for strong 2025–2026 cargo volumes, and they've been signing new long-term SPAs (e.g., Tokyo Gas, Naturgy) despite the noise.
- **Cash flow inflection ahead** — Q3 showed explosive EBITDA growth, and 2025 guidance remains $6.35–6.5B. They've refinanced aggressively ($3B notes in December alone) and even initiated a small dividend (~1% yield), signaling confidence in near-term liquidity.
- **Analyst targets imply big upside** — Even after cuts, average PTs are in the $9–11 range (some higher), suggesting 50–75% potential from here if sentiment flips.

### The Bear Case (Why It's Still Risky and Could Go Lower)
- **Legal overhang is real and ongoing** ? BP won a $1B+ arbitration in October, Shell is appealing its loss and accusing VG of a "campaign" against them. Total exposure across cases could still run into billions, eroding trust with customers and creating headline risk.
- **Debt is heavy and margins are compressing** ? ~$30B+ in long-term debt, negative FCF from capex, and narrowing Henry Hub–global spreads (due to rising U.S. nat gas prices and softer Asian/European demand) are squeezing profitability.
- **Momentum is ugly** ? The stock's down ~75% YTD from IPO highs, with insider selling, repeated PT cuts (Citi to $9, Wells to $8, etc.), and no clear catalyst to stop the bleed short-term.
- **Broader LNG cycle risks** ? Potential oversupply wave in 2026–2027 could pressure spot/commissioning profits, which have been a big driver.

### My Overall View
At current levels (~$6.20), **VG looks like a high-conviction asymmetric bet for patient holders**—the hard assets and production growth are there, and the market is pricing in a lot of worst-case legal/debt outcomes already. Your $7.35 basis isn't far above today's price, so you're not deeply buried.

If you believe management can navigate the arbitrations (they've won some key ones like Shell initially) and deliver on Plaquemines/CP2 ramp-up, holding or even averaging down could pay off handsomely over 2–3 years as cash flows normalize and the valuation gap closes.

But this isn't a low-risk name—it's leveraged, litigious, and cyclical. If more bad arbitration news hits or debt markets tighten, it could test $5 or lower.

I'd probably **hold tight** and watch Q4 earnings (likely early 2026) for updates on damages, cargo volumes, and offtake progress. If you're risk-averse or need the capital elsewhere, trimming here to preserve gains from your lower basis might make sense. Congrats on getting in sub-$8—that was a solid entry in hindsight!

I own a good chunk of VG at $7.30 avg price. I had a discussion with Grok about it, for what it's worth and sharing it here. My thesis is that the value of the assets alone should be a floor. I'm probably wrong....wouldn't be the first time.
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Question about invested value of assets.
**Venture Global LNG has invested approximately $43.3 billion** in its LNG facilities as of September 30, 2025. This figure reflects the net book value of property, plant, and equipment (PPE) reported in the company's Q3 2025 financials, which primarily consists of capitalized costs for constructing and commissioning assets like the Calcasieu Pass (10 MTPA capacity, operational since 2022), Plaquemines LNG (27 MTPA across two phases, commissioning in 2025), and CP2 LNG (Phase 1 at 20 MTPA, under construction with FID in July 2025). For context, capex spending reached $6.4 billion in the first half of 2025 alone, driving PPE up from $34.7 billion at the end of 2024.

The company has raised over $80 billion in total capital since inception (through Q2 2025), including recent financings like $15.1 billion for CP2 Phase 1 and $4 billion in senior secured notes for Plaquemines. Planned expansions, such as a potential $18 billion add-on to Plaquemines for another 18 MTPA, could push total project commitments beyond $75 billion, but the $43.3 billion marks sunk costs to date.

At a $14 billion market cap, the stock trades at a steep discount to invested capital—implying a price-to-book ratio under 0.4—which does highlight acquisition appeal. However, several factors explain why it hasn't been snapped up yet:

- **Ongoing legal disputes and arbitration risks**: Venture Global faces multimillion-dollar claims from customers (e.g., BP, Shell, Edison) for allegedly delaying contracted deliveries to sell spot cargoes at higher prices during commissioning. It lost a $1 billion arbitration to BP in October 2025 (with potential for up to $11 billion in total exposure across cases), and similar suits are pending. These have created uncertainty, with FERC also investigating contract compliance.

- **High leverage and cash burn**: Long-term debt stands at $31.7 billion (up from $29.1 billion at year-end 2024), fueled by aggressive expansion. Despite $9.3 billion in nine-month revenue and positive EBITDA ($4.3 billion), operations generated negative free cash flow due to heavy capex, leaving just $2.6 billion in cash as of mid-2025.

- **Stock volatility and execution risks**: The January 2025 IPO targeted a $110 billion valuation but closed lower; shares then plunged to $17 billion amid disputes and market skepticism, contributing to the current $14 billion cap. Analysts note "slander-era" reputational hits from Big Oil critics, plus broader concerns over U.S. LNG economics (e.g., Shell's CEO calling some projects "not economically fully rational").

These issues have deterred buyers despite the asset value, though resolution of arbitrations (some wins already, like vs. Shell) and Plaquemines ramp-up could shift dynamics. If you're eyeing an acquisition play, watch Q4 earnings for updates on damages and offtake (e.g., recent 1 MTPA deals with Mitsui and PETRONAS).

For me, it was learning how to spell properly

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inverse Cramer

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Isn't "inverse Cramer" a good thing....i.e., better-than-market returns?

I haven't followed Burry in several years....last I recall he was buying land(?).

OP is focused on the shorts, but what does the board think about EL? It's way off its historical highs and has recently gotten off of its bottom. Thanks for any insights.

Are you talking about the president heads, south of I10, near downtown?

LINK

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honed; honing
transitive verb

1: to sharpen or smooth with a whetstone
2: to make more acute, intense, or effective

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I'll allow it, but you're splitting hairs a bit and misses my point about "honing in" being misused. :cheers:

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this lady is such a nut I kind of want to swing by it if I’m ever there

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And, that's the genius of this woman's "subtle" marketing plan. If only, she would monetize the visitors somehow. Maybe not so genius after all.

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Best legs.

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Fixed

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fots

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:lol: :lol: :lol:

I was probably like 18 yrs old before I realized (was educated) that the proper pronunciation is "fart" with an "r " in it. I had no idea that word had an "r" before then. :lol: :lol: :lol:

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List is crap, no yellow jacket rating

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It's there....look again....the first thing I looked for as well for a good reference. Found out I'm a pussy. WTH is a bullet ant?

Putting my dick in crazy 40 yrs ago...led to a cascading series of horrible outcomes that affect me to this day