I agree ESG is one of the more 'speculative' in the ASX 200.
It is certainly not a buy based on earnings. But all ESG holders should know what they are getting themselves in for.
ESG is an ASSET BUY rather than an income buy. They buy it because it is trading at less than 1/3rd of past transactions based on near-term gas upgrades. And because they know it is a corporate target. And because almost every day we hear of another LNG deal - gas is in increasing demand.
So, ESG holders know (or should know) the technical and market risks. But they manage those risks through ESG's gas being so cheap relative to the price, and that that those gas reserves will continue to increase due to the volume of drilling and pilot activity.
Santos have speculated $500m on ESG and PEL 238, at a 50% higher price than current prices. TRUenergy are speculating too.
So I am 'speculating' that I and many other ESG holders know an underpriced gas company when we see one.
Y
ESG Price at posting:
76.5¢ Sentiment: Buy Disclosure: Held
