a gsa with santos?, page-43

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Last week I promised to post some extracts from the Deutsche Bank report on ESG that I received in November. Here's a few, and I am prepared to email it to a few people if requested (I was asked not to widely disseminate the report)... send request to [email protected]

Extracts:

Initiating coverage with a Buy

Eastern Star Gas offers exposure to CSG in the Gunnedah Basin in NSW with significant reserves upside and solid momentum towards securing gas monetisation routes. Proximity to domestic demand hubs positions ESG to replace
declining Cooper Basin domestic gas availability. The potential for Gladstone LNG feed-in offers a transformational, high value monetisation route and represents the single largest lever to create value. We believe Eastern Star's growth opportunities are not reflected at current levels and initiate with a Buy, $1.10/sh PT.

Potential for LNG feed-in offers NAV upside of between $0.62-$1.46/sh

While multiple Queensland LNG projects require additional gas reserves to underpin expansion trains, the availability of uncommitted Queensland CSG appears limited, creating LNG feed-in opportunities for Eastern Star. An LNG feed-in GSA for 2,000PJ could add between $0.62-$1.46/sh to our NAV. In our view Newcastle LNG (NLNG) will struggle to move beyond the conceptual stage,
with greater technical risk from the use of novel technology making it less likely LNG end-users will sign binding LNG offtake contracts. However, the NLNG
project should strengthen Eastern Star?s negotiating position with Queensland CSG-to-LNG proponents.


So ... with LNGN as a feasible option ESG is in a strong position to get a good price for its gas IF it decides instead to sell to the Qld projects. And a GSA could be worth up to $1.46 on top of their $1.10 valuation ... so their estimate of upside is to $2.56.

There you go DB76 (perhaps = Deutsche Bank since 1976 and acting for STO????? LOL) either way ... LNGN or GSA into one or more of the Qld projects .. ESG wins. Selling north precludes the need for your much feared capital raisings to fund LNGN so it remains an attractive option doesn't it?

H