Ann: Southern Cooper Basin Gas Project - Operations Update, page-15

like many I have been thinking long and hard about the SP and I think if we were honest with ourselves we can easily explain the lack of interest up til now.

The first is csg itself. CSG is controversial, both from an enviro and economic perspective because it's always hard to get a clear picture of exactly what the resource consists of and the regulations surrounding the project. Will initial results correlate across to the broader resource? Will the greenies/govt agency turn up and spoil the party? It's all a bit cloudy for some....

Second, O&G is a sector that's well out of favour at present due to the recent collapse in crude prices. The puff has gone flat for now.

This makes accumulation easy but realisation of assets harder to sell. Having said that I think there is massive upside once the local operators see the results I'm expecting from STX. The East Coast gas shortage story is real, many of the planned csg projects look all too hard and the Cooper is ripe for revival. If STX can get sizeable flows then the various Cooper Operators will have to sit up and re-assess their lowly assumptions about deep csg as a commercial enterprise....

My personal musings only!

HC