While all you describe is relevant to the BUY current sp, I believe there is a much larger problem here which may affect progress on offshore drilling for some time.
As I see it, the law of "Supply & Demand" for gas on the east coast of Australia could have a major influence on action in BUY over the comimg months - by this I mean the current activity in the major (on shore) Gas Companies chasing agreements on coal seam gas.
There is the beginning of an excess in supply in the short term, within projects planned the next 1 to 2 years - this is already affecting gas prices.
Reserves have not all been proven for these on shore projects as many more wells need to be completed but the commitment and a lot of the finance is already there.
Imo, taking a higher risk and at a higher expense, to drill offshore would be less desirable in the current economic circumstances.
This is in spite of the location of PEP11 to the Sydney/Newcastle markets.
The only situation which could change and precipitate more urgent action in BUY would a rapid improvement in the economic outlook in NSW - something which is unlikely at present.
BUY Price at posting:
1.9¢ Sentiment: None Disclosure: Held
