push your chips in the middle of the table, page-32

SF,

You are very poetic today.

I agree that Market value and Fundamental value are different. Market value has a lot of Expectation built into it which is why when the Expectation of the market is not met the sp gets hammered. Based on Fundamentals - ESG has no GSAs , 4xMOUs one of which is to just do a feasibility analysis, trivial income from Wilga Park , huge cash outflows drilling holes so on a cash flow profit basis it is fundamentally a negative proposition, which has to be offset by CRs periodically. The balance sheet - ESG has assets which have a value if there is a market for the gas within, it has some land on a island near newcastle, it owns some equipment. Add all this up and you get a value per share but nowhere near the market value. You can make an assumption about a gas price but if you dont have a GSA what does it mean - $0 to you directly but it may be of value to another who can sell the gas and so will make you an offer, like STO could. I dont deny that ESG has a Fundamental value but that like the Market Price is based on assumptions of certain mrket conditions, events and outcomes. I know the market value is about $900M and I know the value of my shares in this market is what I can sell them for on Monday. That is really all I know. The market informs me. As an investor I also have an expectation and as I have said before it is that in a Takeover ESG would fetch between $1 and $1.50 based on my methodology of using the 1 Month VWAP. You may not agree with me but I am entitled to my view. My expectation is hardly a DR, is it?

The Storm/life-jacket is a good one which I interpret to mean that we should be buying PUTs in case our ESG sinks in the storm of water regulation foretold by what they are doing to the murray-darling basin.

The Australian today 9/10/10 had an article on the admission by BG and STO that there will be an effect on the undergound water levels. (That is a given as you cant pump out GL of water without some effect ? )

What did stand out in the article was that the Darling Downs Irrigators commissioned a report which claimed that the balance between the Condamine Alluvium and the Great Artesian Basin would be affected. We dont want the Greenies to start harping on about the Great Artesian Basin like they have done with the Murray. The last thing CSG needs is water-huggers trying to impose conditions that would make the CSGers re-inject the water. We want trees to have the water, towns to have clean water for drinking and bathing and new lakes for sailing and jet-skis and farmers to have water for their feed-lots.

But ESGs plots are out of the way a bit in a forest which doesnt drink 700m down so we could do OK in this beat up by the Greens. Just hope that the coal seams we pump the water from dont have any connection to ones which those pesky farmers use for their crops or livestock or the Humans use for drinking and bathing. If our operations do cause a drawdown we can offer Reverse Osmosis to make the water good again to replace the drawdown - problem solved.

So we at ESG are looking good but STO maybe be under a cloud as much as I hate to say that being a FOS but also a FOE I am a bit conflicted. If we ESGers are hoping for a Tony Burke simple stamp of approval on the water pumping , tree growing, evaporation strategies of the LNG hopefuls in light of the murray-darling reports and the new Green hold on the federal govt , we may be in for a surprise.

I hope not - make sure that all of you have doen what "Nervous" suggested and emailed , phoned, faxed Tony Burke with our deep concerns that too much favour to the water-huggers will jeopardise Billions of dollars of LNG investment in struggling QLD and make Anna Bligh's re-election unlikely.

Cheers