Contrary to what some believe, I am open to all sorts of possible scenarios with ESG. And a deal to supply GLNG is just one of them.
When it appeared (as it still does, given that there is no EVIDENCE of any JV activities thus far), it is reasonable to assume that the relationship between ESG and Santos is adversarial. And until we see some firm evidence of deals either between ESG and Santos, or between ESG, Santos and a third party, we should rightly assume that it is an adversarial relationship. And the lack of a board rep is just one piece of evidence in this regard.
After all, Santos have been in ESG and PEL 238 for 16 months now, have an obvious need for gas, and yet have done nothing to commercialise the Narrabri JV gas. Meanwhile, ESG have been doing all the deals.
So as a working hypothesis, we have to assume that there is no commercial relationship as such, becuase we have seen no evidence of it. And that remains very much INTACT.
A CURVEBALL...
However, consider if you will what happens if there is a third party interested in ESG. We have speculated that ESG may do something that is unacceptable to Santos, like sign a large offtake or equity deal with one of Santos' competitors.
But, let's turn that around for a second. What if ESG does something that is unacceptable TO THE THIRD PARTY? That is, ESG signs a deal to supply GLNG. Might this also be the catalyst for action, but this time it would be a third party forced to move or "forever hold their peace"..?
There are all sorts of potential scenarios for ESG. Their resource is large, their strategic value is high, and the number of potential buyers and customers is large. And the alterative sources of large gas are limited.
Let's see what happens next. Whatever it is, I am sure it will be good.
Yaq
ESG Price at posting:
83.5¢ Sentiment: Buy Disclosure: Held
