board are charging, page-20

Jojo,

Indeed it might be wise to consider a downside case where:
* The big players have all the gas they need for the first round of LNG plants
* They will only buy reserves from others if they are cheaper than their own resources to develop.
* Santos, Origin etc hoard their reserves, not dumping sufficient in the domestic market to destroy the price (and there own legacy businesses).
* BOW therefore has to either sell gas into the domestic market at around current prices, or build it's own electricity producing business (better but high capex).
* BOW has participate in developing an alternate, eg petrochem, CNG, GTL.

Atm as Jojo points to, we just don't have enough information on the quality of the BOW resource. Proving it to 2P might still leave it less competitive than other 2P if the flow rates are only mediocre. But imho SOME of it will be worth a premium over alternatives the majors have in their own reserve portfolios.

Perhaps now would be a good time to look at the REALLY BIG picture. Eg take a look at the recent Santos presentation with the bubbles for gas resources globally, where the 250 tcf touted for Queensland is quite significant. What is that worth to the world undeveloped? $50bn,$100bn,$250bn.

Now look at the share of it BOW has? over 1% at 3P pretty soon. Maybe we could end up with 2 or 3%??

If all else fails I think you"ll find BOW prepared to break into the serious electricity market in the same way as AOE has with a 450 MW gas turbine plant. That was a $530mm project, largely debt financed and originally with a 50% equity partner. Not a big stretch if need be.

Worth adding for the long term if BOW stays down when the market recovers imo. Just don't expect the sp (now or in 6, 12, 18 months etc) to reflect whatever is the true value.

EL