reason for santos to want esg, page-8

Great articles and it is well worth visiting STO to look at their presentation.

I think their strategy IS emerging...read the following:

"Santos, which has a 60 per cent interest in the project (Petronas has 40 per cent) is talking to more prospective customers and dangling equity involvement in front of them as the lure. Santos is keen to sell up to 9 per cent of the project."

They are "buying" their end customers by offering part equity. But do the maths...they are offering 9%...leaving them with 51% which is effective control and also operatorship status.

They have neither over ESG!

Extending my hypothesis by inserting the action steps:

(A) Current Actions Underway by STO

(1) Ongoing discussions with Asian power companies with a view to securing long term contracts with the equity incentive. The Gunnedah basin offers a perfectly contained separate offering. But there will be no detail provided to ESG whatsoever. They can do this as they are representing their own Gunnedah leases ostensibly. Once an MOU has been signed with STO and Asian customer/s, they will then move to takeover ESG.

(2) Forces are at work to stabilise (and paralyse) the ESG SP. STO do not want it bolting on exuberance or value which they and they alone will bring to the table.

(B) Likely Future Action

Once STO have secured a customer or customers, they will move quickly to consolidate all of the Gunnedah Basin under their operatorship...by launching a takeover bid.
With the customer certainty in place (but known onlty to them) they will better know their final offer price fo the 80.1% and also having had the benefit of a supressed SP, they are better able to pitch a bid that looks so far above the prevailing SP range.


Once we are comfortably bought out, STO will announce their grand plan and everyone will go "aaah..what foresight...what daring."

My tip is that they will take the gas line up to Qld and link in with the Maquarrie infrastructure. Then 2 trains would be an absolute cake walk...and 5 which Knox is also talking about would also look a better proposition.

To all the ESG Doubting Thomas'...at the very least you've got to say that there is a lot of positive talk about just how big the worldwide market can be here.

AND, just how big a punt that STO are taking.