CaptGV, The numbers I crunched were from a different perspective, but the same conclusion. From the latest quarterly, Beach has agreed to supply around 10 PJs of gas a year for 15 years as part of the Santos deal, which I calculate to be worth around $40 to $50 million per annum for 10 bcf a year (assuming $4 to $5 per giga Joule = 1,000 cf). This should add around 10% to their revenue. Not a huge deal.
They have also put a number on the Itochu LNG project, where they are aiming for around 60 PJs per annum for a 1 Mtpa LNG plant. So that's another $240 to $300 million per annum for 60 bcf. Now if they get anywhere near the 200 tcf of reserves that they think is in the Cooper Basin, then I can't see them being satisfied producing 60 bcf per annum from a reserve of 200,000 bcf. They can go 10 to 20 times this production rate (if technically feasible) and still have hundreds of years of reserves. And then there's Tanzania and Egypt (well maybe a question mark on Egypt in the short term).
So from a fundamental point of view I see them as a two to five year play. If you look at the prices being paid for the CSG players in Qld, then IMO they could easily go multiple times in a few years.
BPT Price at posting:
81.5¢ Sentiment: LT Buy Disclosure: Held
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