thoughts on csg and energy for the future, page-21

favre,

I wasn't suggesting BOW is too small for the other majors - just Santos. On the contrary I think BOW is a great fit for BG or ORG. Either could be a suitor.

The problem is that STO needs to catch up to BG and ORG. There is no point in STO buying BOW if it still leaves them short. They might buy COI or at least their Bowen tenements (since they are surrounded by STO tenements already) but that will be a pittance. Of the three larger independents we've identified they'll probably only get one of them - BOW, MEL or ESG.

Another downside to ESG we haven't really mentioned is the high CO2 content of Gunnedah Basin coals. That means you have to either run more expensive corrosion-resistant pipelines or you need to install CO2 cleaning plant. I'm not sure about BOW but MEL won't have that problem in the Walloons.

So the 'Goldilocks fit' is a very good term for Gas Rush 2. Gas Rush 1 was just a mad rush to snap up the prize assets. Gas Rush 2 will be the majors carefully considering their positions, how much more gas they need, and which of the independents is "just right" for them.