the 200-300 faceless men (and women), page-6

Minerva,

I wouldn't think the land settlement is a biggie one way or the other. Yeah, a suitor who has other plans for the gas doesn't want to end up with a $25m parcel of land that is surplus to requirements. But this by itself isn't a deal-breaker.

The big deal will be the signing of the gas over to NLNG's own foreign buyers/equity partners. That will be unacceptable to Santos. (Just as well Santos doesn't have anyone on ESG's board, otherwise they would be horribly conflicted when voting on such a company-making transaction.) Santos owning a share in a company who is competing against their own GLNG project. Not a good look, and rather hard to explain to your own shareholders and analysts. Even worse when you consider that it is part Santos' money that is funding the work, by virtue of Santos topping up in the recent cap raising.

Love the irony.

And Santos will know that these negotiations with foreign NLNG partners are quite mature.

One question yet to be answered is will ESG beat Santos to the punch with an announcement of their own LNG buyers, or will Santos announce their own Kogas equity/offtake first?

As for 2P reserves upgrades - I think your 50% is a little conservative there. There are a couple of clues as to how big an upgrade could be. One is the volume of data we have from BW and BW West since December 31st (and notice how much of an upgrade was achieveable just between October-December 2009). Another is ESG's current 2C resource. - gas that can be proven to be economically extractable, but is market constrained... what happens to this number once you add the large LNG market...

And, as a baseline, we have the known extra MOU's already signed since the last upgrade.

So, I am sure the next reserve upgrade will surprise the market to the upside.

Yaq