a $25m commitment to lng, page-21

Hi Buddy,

I think if there was on offer from a Shell or BG and the price was right, STO would sell out, just as AOE did to BG.

There really wont be an incentive for STO to hang on to it. The fact is that STO bought 19.99% for a reason and not to be simply a passive investor. If BG or Shell take 80%, and direct the 65% of reserves up to QLD, STO can hitch a ride and send their 35% share to Gladstone. There will be no reason to hang on to the 19.99% when they cannot do anything with it, and we know that they could use the funds on selling out to carry on with their other permits in Gunnedah. As you said, STO have many JVs. They don't hold many (if any) shares in other companies though!

So I see no-way that STO will be a passive investor under this scenario. They will be stuck with a shareholding that they could do little with.

On the second point, do you think STO really want to kick in another $200m to maintain their stake in ESG? I don't think so. I think ESG has the potential to become a real problem for STO as Newcastle becomes a more feasible option. That is why they will follow Shell and do to ESG what Shell did to AOE.

If they strategically need ESG for their longer term plans, they will not have an alternative but to buy it out and put Newcastle to rest.

If not, then they will exit the register and make way for someone else.

I think things just got a whole lot more interesting for shareholders. No wonder my sources were reporting DC has been looking very very smug/confident of late. I think he will have a lot more to report to the market in the short term.