bid over $2.00?, page-17

jtaylor1,

as reported on pg26 of Friday's AFR, the fact remains that STO only have a shareholding in ESG of 19%. This basically gives them nothing but a shareholding in a listed company (apart from 35% purchase of Gastar stake).

So, with ESG in discussions with a number of groups, STO will be concerned that they agree to sell their gas on to BG or Shell who also have insufficient reserves.

This will mean that there is now immence pressure on STO to ensure this does not get away.

We may in fact potentially have more of a bidding war here.
As you have pointed out, AOE will not get a higher offer from BG due to the Chinese National interests on both sides.

However, this is not the case with ESG. The Chinese could well be competing with the Malaysians as it currently stands.

And, if STO are arranging an offtake and including 9% equity stake in Gladstone, they will probably also be discussing with the potential purchaser a bid to take out ESG as well. So, we could well have a bidding war here, only for the fact that there is not much quality remaining, particularly given the contingent resource.

Now, can anyone answer the following.....if ESG is taken over by STO or anyone else, will the 2C and 3C revert to 2P and 3P given you would expect a market (LNG) to now be available for the resource?

Thanks