and if you cannot see it coming.........

This is Mr Lincoln Augustus, first second cousin of Holymagiman.

We are on the slopes above Leh, and today has been a clear day, so we are just sitting here having the fine brewed green tea and the Jamaica Numba 1, while we look way way yonder East into China and enjoy the views.

So Eastern Star has had an offer from Santos and that has made everyone most excited. It is somehow hard for us to get excited about such things up here for it is freezing cold, and the only thing that keeps our spirits up is that all those Chinese people down there must be shivering in their little chongsams or burkas or whatever they wear...sort of like having a joy in collective misery, so to speak.

We have listened to peter Henderson's littlw speech on the old two way transmitter, and we find it interesting.

Looks like Metgasco is going to have some sales to the Richmond Dairy, and that is better than having a poke in the eye with some stranded gas in the middle of nowhere.

The slow dewatering of the Harriers is also not such a bad thing as it lessens the risk of the coal pores being blocked with silt annd establishes a consistent good flow. As the man said, they are having "very encouraging results", and those metgasco people are misers with their words, so that augers well. It may take a bit of time longer to get the results, but if one has already waited for the food to cook, then one has also to wait just that longer for the food to cool before one makes a meal of it.

Henderson says that the followup well to Kingfisher is exciting in that they expect to find more than 1 Tcf of gas. Now, 1 Bcf of gas = 1.06 PJ

Therefore I Tcf of gas = 1060 PJ, which is a very big number

But we notice from one of the previous presentations that there is an internal estimate of 11,000 PJ in PEL 13, which is an even bigger number.

Now, Bowerbird 1 and 2 have given Metgasco reserves of 333 PJ. If our memories serve us right, these wells are in the south-west corner of the Eden freeway, so we extrapolate some pretty big figures within the acreage of this freeway when all the figures come rolling in, by and by.

And, as stated previously by the company, PEL 426 has no booked reserves yet, but it has coal thicknesses of 20.6m with gas content of 130m3/t.

And most importantly, we have a unique situation of low water production and plans for a pipeline to Ipswich, which means that Metgasco's gas is not stranded and does not have the water problems bedevilling others.

Metgasco is not a company which needs a takeover offer at present, for this is one company that we view as a longer term hold....of perhaps a couple of years, give or take.

It will have its ups and it will have its downs (hopefully not too many) but one has always got to remember that Santos has just set a benchmark of 50 cts a gig for Eastern Star's 3P gas in the current market.....and through a Scheme of Arrangement, which we feel is slightly different from making a takeover bid in the open marketplace.

Even at that price, with the current 3P that Metgasco has, it should be capitalised at about $1.25 billion, or approximately $4.60 per share.

Now, if the conventional gas and the 3P reserves that can be expected in PEL 13 and 426 are taken into account, then we are looking at a very much larger figure.

Of course there will be some dilution with capital raisings along the way, but those are the facts as we see them from our lofty perch up here, high above Leh.

But a chill mountain wind arises and it is getting colder, so we will have to light up another Numba One Llama Spejial and spiral away into the darkness with the smoke as we curl up to each other in a spiritual warmth of togetherness.

And we know for a fact that when one is sitting on a cold cold mountain, one day passes into two and then into three before one knows it, and soon it will be Thursday and the pigeons have flown the coop.

But whether you are on the mountains or the plains, it is good to know that the sun always rises in the East

Blessing of the Lord
MLA