usa indexes to fall back.hot shares too., page-26

Hi EL,

Yeh, I like the long term outlook for gas, but BOW is just one of many companies with gas in the ground. Unless they have a mechanism to monetise it, (and quickly) you'll end up with a glut of gas and the shares won't be worth $1.40.

I like AOE - currently pushes most of its gas into electricity (=80% of revenue), new power station coming online next month which doubles their electricity output.

Also MEL - has an agreement to push gas into Swanbank pwr station in Ipswich. Builing a pipeline (paid for by CS energy = $90m).

But at this point, BOW has reserves but no real plans on how they will cash in on it. So short term valuations only hold true if someone else wants to buy those reserves right now!

AOE's recent annoucement seems to suggest that they have already got enough gas and wouldn't need to spend $250m or $300m buying BOW.

I think most companies say that the cost of finding gas in existing tenements is only 2c or 3c a Gj, why pay more?