loosen up!, page-8

Lautrec, while I agree with your sentiments regarding the daily expectations for another SENSATIONAL announcement being unreasonable - I'm not sure I agree that there is nothing new that could instantly add value to MEL in the short term.

Firstly, I would like to think that if Corella 18 was to be successful than the CSG reserves that MEL are already sitting on might start to get some attention from the market. Multiple people have already commented on the minimal value attributed to their CSG reserves... from my perspective, and what I know about CSM - I understand that the reserves are valued at the very lower end of recent metrics for two reasons, one being locality to existing infrastructure (for monetizing the asset) and secondly because of possibly marginal flow rates (which has always been my belief). While infrastructure is not yet at hand for their reserves, they are close to markets. And just today I've been encouraged that perhaps the second issue (flowrates, if it is an issue) can be solved through improved drilling and completions techniques - have a look at the improving flowrate from the Bibblewindi ESG lateral pilot if you haven't seen their announcement today already. BTW, I don't hold ESG (but I do follow closely) but every time I think of buying some, I end up buying more MEL as I'm continually more convinced of how undervalued they are in comparison!

Secondly, now that Kingfisher appears to be a large commercial discovery, we have another asset (in conventional reserves) that should definitely appreciate in value with time... possibly more valuable than their CSG was ever going to be? Who knows - but handling costs are less exhausting than CSG (with dewatering, water handling now impinging on margins in the industry). No, they're probably not going to double or triple their resource overnight, as you pointed out - but it certainly should improve/increase in time. And surely the success of the Kingfisher well will lead to fast-tracked development of other possible targets and prospects in PEL16. And their is always the possibility that MEL finds a market for their newfound reserves, and establish some healthy gas contracts - this, I believe, would also add impetus to the share price.

Thirdly, there is the possibility of action from left field that will help MEL get proper attention from the market and move closer to a fairer value (IMO). This could come through multiple areas such as Lion's Way Pipeline being approved, or, as we have seen recently, bigger players such as Santos move into NSW by taking HGO share of ESG, and Gasstar (I think). Maybe the next year will see corporate activity (read merger/acquisition) for MEL, or even just securing a big JV partner farm-in to help develop their assets. Corporate activity elsewhere in the CSG sector also may start to get people's attention again, and MEL might benefit again from new interest spawned that way. Possibly just attracting the attention of some institutional investors after they can prove the commercial value of Kingfisher might be stimulus for a re-rating also.

This is all just my opinion as well, so DYOR. But I have done some research and I would still think that buying anywhere around this level would represent very good value... particularly into mid-2010, and the longer term. And I think the recent weakness is still just SPP sell-down and general market silly-season dis-interest... but I do see the weaker share price as an opportunity and not a loss at the moment.