To answer your question directly cruiserdog, AGK has bought the Powerdirect electricity retail business in QLD. The only safe way to run a retail business is by being fully integrated, and a large proportion of power generation in QLD is from gas fired plants. In the past AGL Paul Anthony was reluctant to buy equity gas, but the recent downgrade has shown them that they need to be more like ORG, which means vertical integration into E&P. CSG is the safest way to get their hands on gas as the risks are lower than conventional O&G. The deal they did with QGC was one approach to this problem, but no doubt in the longer term acquisitions will be on the horizon.
You're right they require gas for their NSW gas business, but they already have a LT contract in place with STO I think at the Cooper basin. The big question is whether NSW electricity retailers are privatised. The logical next step for a buyer of those assets is to buy CSG companies in NSW, as we all know it's not coal fired power stations that we will be building in the future.
MPO is unlikely to be the next target...SHG is far more likely given its stage of development and quality of assets. I don't think that will happen for a while though.
MPO Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
