From my own perspective, those who have bought shares in ESG hoping to reap a reward such as you've described are going to be sorely disappointed. Now, I'm prepared to accept that I'm completely wrong on this issue but I don't believe I am.
A few others on this forum are finally coming round to what I have believed all the while. ESG's gas supply is too big for them. In the near future they have no means of commercializing their own resource and in any event, it would be an impossiblity without completely changing their business model.
In my opinion, that is why it is wrong to imagine ESG's price per share in a potential takeover is in any way tied to value metrics. If ESG are taken over, the current price for gas will have as little to do with a takeover price as the current price for gold would have to do with what any one of us would accept if we had a wheelbarrow full of it in the middle of the Simpson Desert and were unable to get it to market. What STO will offer ESG shareholders in the event of a takeover is nominal cash and script. So for those who are holding ESG because you believe in their story, I hope you believe in STO's story as well - because you soon may be a shareholder in that very company.
Incidentally, like others, I also believe that ESG is anxious to prove up their resources, for all the reasons stated in previous posts by other contributors. They, like us, would love an auction. If they don't get one though, and STO doesn't make an offer by May or June, what are the alternatives for ESG's management? Explore more? Drill more? Find more gas? How much will that cost? Where will they get the money to pay for those rigs doing the drilling? $40,000 per day rig hire is a lot of dosh (not to mention all the other costs) and I would suggest if no takeover activity is imminent or active by May, another capital raising is very likely. Of course, the reserves upgrade will have happened by then and ESG's share price should have (we hope) gone up to a little over $1. But if that possiblity eventuates, the question that niggles is, what will the SSP be in a capital raising and where to from there? And that, ladies and gentlemen, is possibly what STO is really waiting for.
What a pity ESG don't pay a dividend for patience. We would all be rich.
ESG Price at posting:
81.5¢ Sentiment: None Disclosure: Held
