esg takeover by sto

Hi All

Hope you have all seen STO takeover of ESG this morning... share price was a bit slow to start with, but looks to be reacting a little now.

This gives us an immediate yardstick to compare the current value of the QLD CSG acreage with.

STO price paid was $0.50/GJ based on 3P reserves which is what most acquisitions seem to focus on, and by my calcs about $0.92/GJ for 2P reserves.

MPO has 789PJ of 3P reserves in QLD CSG = $394.50m

Based on 2P reserves instead = 328PJ = $301.76m

Take a mid value and you have about $350m. Take say a 20% discount just to be safe, and you have $280m.

Now that is worth about $1.15 per share on its own!!!

Add in a cash backing of roughly 65c/share and you have assets of $1.80 per share, and that excludes north america oil, north america gas and south africa.

No wonder we are all getting so frustrated with the share price!

Clear to me though that eventually we will get our pay day, and that topping up at these prices has very little risk, with very high upside.

Good luck to all.