Wayback in July 2009 Santos, seeing all the gas resource opportunities around get snatched by faster movers didnt want to miss out.
It didnt have too much money so in a Flash of strategic brilliance it simultaneously negotiated the purchase of its 20% of ESG equity and 35% Narrabri CSG JV stake , from very willing sellers , effectively locking up ESG from the other predators.
It was a gas reservation play.
It was opportunistic,
Occams Razor is the search for the simplest "Lean" explanation - the above is Simple.
Real Estate companies often form a land Bank for Later On.
Santos has its Gas Bank for Later On.
Santos could look to move ESG along it project development conveyor from "Early Stage" to a higher status after it gets GLNG Train 1 underway.
Even though STO has reduced in GLNG to 30% it still has a big capex. STO is not Father Christmas nor is it the Money Tree.
You need to get your Japanese Prospectve Partners to Buy-Out Santos. Santos gets a big payday $800M+ in exchange for its ESG Equity and JV% and ESG gets the Japanese as replacement "Strategic Partners".
STO still has all its Gunnedah tenements which split ESGs and they may have gas in them as well which could be sold into the LNGN ultimate full development.
An Offer from the Japanese would provide that opportunity for STO to profit and ESG to gain its independence from a Partner it has never seemed to welcome. It would also force STO to decide and provide some competitive tension for the ESG Jewels.
It would be better for ESG to choose its Partners.
No one likes an arranged marriage.
Dont forget The Dart - what is DTE up to ? Maybe they are eyeing off ESG or the STO interests. Maybe they are having behind the scenes discussions with STO. After all they have the ex AOE management who are ambitious to recreate the AOE growth profile in their DTE.
ESG is a Gift that provides a Glee that could be bottled.
Cheers
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