john anderson, chairman interview, page-22

I think it is clear that the IER released to the Market Mid September will contain the first and only release of the Technical Expert Report ergo the "Reserves Upgrade" or whatever can be reliably concluded from 4 months of Tinstfield Pumping and Gassing.

They would say that the more data they have the better so would leave the data presentation to the Certifiers and onto the IE as late as possible.

Why would they be compelled to release it late August when it goes to ASIC for Regulatory review as that is a precedent action prior to the posting of the Scheme booklet simultaneously to the Market and Shareholders. ASIC might want it amended.

They have tightly wrapped the Reserves Upgrade with the Scheme booklet.

The 50c/GJ will be defended as a simple prorata of the
implied nominal bid $924M for ESG's 65% share of JV 2797PJ the last 31/12/09 JV 3P Reserves = 1818PJ . The 50c/GJ is a variable not a fixed metric. With the STO share price at say $12.70 the implied nominal bid amount is now $887M making the "Metric" 48c/GJ. If the STO sp goes above $13.23 the metric will be greater than 50c/GJ. It is all based on the Old Reserves all that was available at the bid date of 18/7/11.

The 50c/GJ is not a fixed metric but is not unlike metrics for the Shell-AOE takeover which had a LNG market oulook, of about 60c/GJ 3P. In a NSW Domgas market what would a reasonable metric be ?


Even TRU Energy has bought 20% of whatever the JV Resources/Reserves are, for a fixed cash $284M so it benefits as well.

The only other fixed "Metric" in the whole deal is the 90c/share that STO has agreed to pay TRU Energy for its ESG stake.

That 90cps could be seized upon by the IE as a base that could help to set the FAIR Range. We would be hopeful for that.

If STO was willing to pay TRU fixed 90cps why shouldnt the other ESG holders get the same no matter what STO's share price has sunk to at the date of the scheme meeting. It is obvious that a STO sp around $10.60 (drop of 20% from $13.23) or an implied 72cps for ESG could be a Vote Killer.


STO are praying for a sp above $13.23 ASAP.


Cheers