push your chips in the middle of the table, page-31

acorn,
I am in the same boat as you. It is uncharacteristic of me to NOT push the barrow of information flow.

There are some substantial bits of information that can further confirm the commerciality of the resource - that ESG should have by now. They have already advised the market of initial pilot performance but have held off since. They are in the midst of running several pilot programs and have provided scant information on actual progress. There was an OB recently and that contained some information, but hardly enough to sate me.

One side of me says, we should be pressing management for answers - because as far as I am concerned - they have twice let us down before with the initial performance and rod failures and then a lack of information on the flow rates, especially at a critical time of the SPP.

However, on the other side, you have to recognise the condition of the company, and I am willing to cut them some substantial slack. They are in a sticky corporate position. Irrespective of whether Santos state they are an investor or a predator, ESG are in a vulnerable position.


Lets face it, Santos didnt just go and borrow a few billion with a few more to come from holders, only to spend $500m a last year on something they didnt intend to have a go at. Remember they refused dillution as well.

Its like the lion putting his paw on the sheep and looking up for a while before he eats it. The sheep moved so the lion put his other paw on it to make sure it stayed there.


ESGs position as being vulnerable to a full takeover needs to be carefully navigated to extract the full value. Remember, DC and the team have skin in the game and their holdings arent exactly liquid. They have substantial incentive to make this work for them, and for everyone.


What should they be doing
Well, in a market where there are not a lot of options, your assets will hold the most value when there a fewer options available or at least certainty.

Let me pose a question. A passenger is about to embark on a journey across a sea. There is a report of possible inclement weather. When is the value of a life jacket going to be greatest?
a. before the journey
b. at the commencement of the journey
c. when the storm hits
d. when the ship is sinking

I think Oct 22 is the commencement of the storm. I have had a read of a lot of the policy that is out there and I cant imagine what else the government can do to make it more pallitable for farmers other than stopping the industry dead or forcing them to fly their rigs in by helicopter so they dont mark the land (Burky, if you are reading this, that was a joke).

The water issues which I believe presented the biggest environmental risk have been treated both in the removal impacts and also in the disposal methods, and appropriate mitigations put in place to resolve them if there is a problem. The land access issues come with the territory and the site and harbour issues have largely been explored.

I doubt Santos want to wait until there boat is sinking, and I doubt the lifejacket seller wants to wait that long. Certainty early on, but certainty under certain conditions.


So, I think ESG holding off for now is a smart thing to do and I am very supportive of this strategy.


This could all of course be complete dreams.

But at least the above thesis suggests that David "Darryl Kerrigan" Casey will at least be in a strong position to tell them they're dreaming and then show them why.


Cheers,

SF