Smart City Clearing Company Ltd's (Sc3) pre-ipo analysis of Guyana's first Agriculture based IPO on the Guyana stock exchange - GASCI.

1. IPO Research Report
GASCI: Pomeroon Trading Steven Jasmin
Sc3 Recommendation: Strong Buy Managing Director
9/17/19 sjasmin@sc3.ltd
Sc3 Research Report: Pomeroon Trading
Guyana’s Leading Frontier Market Merchant Bank
Investors should consider this report as only a single factor in making their investment decision.
Introduction: Pomeroon Trading is a Guyanese company growing and processing coconuts and
tropical fruits from a 700-acre farm in Guyana. The main product is coconut water with by-
products of flesh (copra), husk and further processed products – along with various herbs, spices,
fruits and by-products. They currently lease an estate of 700 acres of land called The Stoll Estate.
The company intends to raise funds to expand from the existing 700 acres to 5,000 acres through
consolidation of farms with existing estates that require replanting and land regeneration.
Additional value creation will be targeted through vertical integration: the expansion of processing
capacity and shipping capabilities.
The company is seeking to raise US$1MM by offering 133,333 common shares to the public at
US$7.50/share. Importantly, we note that the public offering of Pomeroon represents the first
public offering of equity in any agriculture company in Guyana on the Guyanese stock market
(and only the third company to join the exchange in over a decade).
Based on our research of the company, its prospects and importantly, the explosive growth
anticipated in the local economy on all fronts associated with the inflow of significant petroleum
proceeds following the discovery and rapid development of the Stabroek block offshore Guyana
by Exxonmobil and others, we view this investment opportunity as a uniquely attractive
opportunity to play off the rapid growth of this developing nation.
Market Overview - Coconut Supply & Demand Fundamentals Support Long-Term Prices
Global trends in consumer preference, specifically the reduced demand for high sugar content soft
drinks has driven a significant increase in the demand for alternative, fresh, “healthier beverages”,
such as coconut water. As such, total global demand for coconut water increased from 363.7MM
liters in 2013 to 865.7MM liters in 2017, or at a CAGR of 24.2%. Forecasts for the total global
sales of coconut water show a similar trajectory growing from $6.15B in 2017 to an estimated
$15.7B by 2024 for a CAGR of 14.5%.

2. 2
Sc3 Research Report: Pomeroon Trading
Guyana’s Leading Frontier Market Merchant Bank
Investors should consider this report as only a single factor in making their investment decision.
Exhibit 1: Global Coconut Water Sales
Source: CEICdata.com
The worldwide market for Coconut Oil, while not growing nearly as quickly, is estimated to sustain
a steady upward trajectory at a 4.5% CAGR between now and 2024. Other coconut products
including coconut milk (different from coconut water) and copra, or the dried meat of mature
coconuts have experienced similar explosive growth rates globally over the past several years and
are believed to likely continue for the foreseeable future.
While the demand for coconuts has experienced tremendous growth over the past several years
and looks to continue this pace, the supply side of the equation does not look quite as robust. While
global coconut production grew by over 2 percent annually from 2000 to 2009, average production
has fallen by 0.1 percent annually since 2010, driven primarily by reduced supply among the
world’s top producing markets such as Indonesia, the Philippines and India, which combined
account for nearly 75% of the global market. The Caribbean grows <1% of the world’s coconuts:
given its fertile soils, proximity to the US (the world’s largest market) and affordable land, Guyana
is uniquely well placed to take advantage of this imbalance.
Exhibit 2 – Global Coconut Production
Source: Gro-Intelligence.com
14.4% 5-Year CAGR
from 2019-2024
(0.1%) 8-Year CAGR
from 2009-2017

3. 3
Sc3 Research Report: Pomeroon Trading
Guyana’s Leading Frontier Market Merchant Bank
Investors should consider this report as only a single factor in making their investment decision.
While forecasting the specific impact of this supply/demand imbalance on global coconut prices
remains outside the scope of this analysis, we note that the average wholesale price of coconuts
rose nearly100% over the 10 months from July 2016 to December 2017. We believe the continued
supply gap facing the global coconut market bodes extremely well for sustained strong longer-
term pricing on the global market.
Exhibit 3 – Historical Coconut Price Performance
Source: Gro-intelligence.com
With a strong fundamental outlook for Coconut pricing, we believe new entrants into the Coconut
supply market will enjoy robust pricing and associated margins for the near-medium term,
bolstering the investment thesis for Pomeroon Trading.
Guyana’s Economic Outlook: A Rising Tide Lifting All Ships
A primary driver of our positive investment thesis on Pomeroon Trading is the simple fact that
Guyana is currently forecast to be the single fastest growing economy in the world, with a projected
growth rate of 16.3% during the four-year period 2018-2021. With a GDP size of $3.63B in 2018,
the growth rate of 4.1% in 2018 and 4.6% in 2019 is expected to accelerate significantly to 33.5%
and 22.9% in 2020 and 2021, respectively. Guyana’s rapid economic growth is directly
attributable to the recent discovery of a world class offshore oil reservoir in the Stabroek block by
Exxon Mobile and several other major oil producers in the last few years. Development plans for
the oil project have been fast-tracked and it is estimated that total production is likely to exceed
120Mboe/d by 2021.
Back in 2000, the U.S. Geological Survey identified the Guyana-Suriname Basin as the second
highest resource potential among unexplored oil basins in the world. ExxonMobil, Esso, Hess,
Repsol, Anadarko, Total, Tullow Oil, and CGX Energy have been a part of exploration and drilling
activities over the years. ExxonMobil Guyana has made 13 discoveries since 2015 and plans to
begin production of ~120Mboepd from the Liza Phase 1 development in early 2020. Guyana is
projected to be among the world's largest per-capita oil producers by 2025.
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11/1/17
Wholesale Coconut Price In Sri Lanka ($/Nut)
96% Increase from
7/16-12/17

4. 4
Sc3 Research Report: Pomeroon Trading
Guyana’s Leading Frontier Market Merchant Bank
Investors should consider this report as only a single factor in making their investment decision.
Exhibit 4 – Major XOM Development Timeline
Source: XOM Website, Company filings
The Liza Project is well underway and is tracking ahead of schedule and below budget. An
impressive feat as most offshore oil development projects are notorious for lengthy lead times and
massive cost over-runs. With oil production expected to ramp up quickly in 2020 to over
120Mboe/d, we expect another significant leg up in production volumes and associated petroleum
proceeds as phase two of the project starts up in 2022, bringing total production volumes to over
340Mboe/d. The longer term opportunity is not fully captured by examining just the Exxonmobil
project, though estimates are placing total gross production at upwards of 750Mboe/d in the next
several years, and as high as 1MMboe/d in the 2026-2027 timeframe, which would put Guyana in
the top 20 oil producing nations by volume.
Exhibit 5: Top 30 Oil Producing Nations
Source: IEA
*Guyana production reflects estimated peak project production of 1MMboe/d
May 2015
Liza 1
Discovery
Well
June 2016
Liza 2 Well
Oct 2016
Liza 3 Well
Confirms 1B
Boe Potential
Jan 2017
Payara 1 (2nd
discovery)
Mar 2017
Liza 4 Well, Liza 3
Encounters deeper
target w/
100MMboe, Snoek-1
well (3rd discovery)
July 2017
Payara 2
well
Oct
2017
Turbot-1
well (5th
discovery)
Jan 2018
Ranger-1
well (6th
discovery)
Feb
2018
Pacora-1
well (7th
discovery)
Jun 2018
Longtail-1
well (8th
discovery)
Aug
2018
Hammer
head-1
well (9th
discover
Dec 2018
Pluma-1
well (10th
discovery)
Jan
2019
Tilapia-1 &
Haimara-1
wells
Apr 2019
Yellowtail-
1 well
Aug 2019
Destiny FPSO
Arrives at
Liza
2020
Liza Productioni
ramp to 120Mboe/d
Present

5. 5
Sc3 Research Report: Pomeroon Trading
Guyana’s Leading Frontier Market Merchant Bank
Investors should consider this report as only a single factor in making their investment decision.
Development by Exxonmobil on the Stabroek block will consist of two initial development phases
which we describe below.
Liza Phase 1 project - Development description
The Liza Phase 1 development is approximately 190 kilometers offshore in water depths of 1,500
– 1,900 meters. The development plan includes completion of a floating production, storage and
offloading (FPSO) vessel which has already arrived in Guyana and is designed to produce up to
120,000 barrels of oil per day. Four drill centers are envisioned with 17 wells in total; eight
production wells, six water injection wells, and three gas injection wells.
Liza Phase 2 project - Development description
The development plan involves a second floating, production, storage and offloading vessel
(FPSO) and related subsea equipment, umbilical, risers and flowlines. The development concept
is similar to that of Liza phase 1. A total of six drill centers with approximately 30 wells, including
15 production, 9 water injection and 6 gas injection wells. Liza Phase 2 startup is expected in mid-
2022 and will develop approximately 600 million barrels of oil. Liza Phase 2 will produce up to
220,000 barrels of oil per day and further capitalize on the significant development potential of the
Stabroek Block.
Conclusion.
The combination of robust coconut market fundamentals and a local Guyanese economy poised to
explode on the heels of a world class offshore development project make an investment in
Pomeroon Trading an attractive risk/reward proposition in our opinion. As the local economy
begins to experience tremendous incremental investment in all sectors, driven by the windfall of
oil production royalties revenue, we believe Pomeroon - and nearly all local businesses - are poised
to benefit. We also believe incremental equity offerings on the Guyanese exchange are just
beginning and listings on this exchange such as Pomeroon should experience significant
improvements in liquidity, and access to new investors as market participants look for a way to
capitalize on this emerging trend.
About Smart City Clearing Company Ltd.
Since June 2017, Smart City Clearing Company Ltd.(Sc3) has quickly risen to become a leading
Merchant Bank and Corporate Finance Advisory practice focused exclusively on the development
of Guyana as it becomes a top 20 Oil Producing Nation. Sc3 is a boutique Frontier Market
Merchant Bank with a leadership team consisting of local Guyanese investment bankers and
industry-leading international investment bankers. With it focus on Guyana, the company is able
to deliver the services of a full-service Investment Bank with the experience, knowledge, and
ability to successfully navigate through the challenges of operating in a rapidly changing frontier
market. The company is proud to work with local, regional, and global institutional investors and
high net worth individuals as well as Fortune 500 and Global 2000 companies looking to work and
invest in the future of Guyana.