Sagar,I've given it a few times.There is a lot of potential as...

Sagar,

I've given it a few times.

There is a lot of potential as the Clarence Moreton is one of the most under-explored basins with respect to its hydrocarbon potential.

I think the conventional potential here is better than the CSG potential.

The seams are a bit thin and ashy for my liking but at lower rank they seem to be producing OK gas. Saturation for the top seams looks high (huge plus) but harder to judge for the lower seams and my opinion is that they are not (minus). Its just a bit hard to tell if I'm right on that as the ash is very high in some of the seams.

They have demonstrably shown they can increase their reserves... albeit with a few drilling hiccups.

High levels of ethane in their wells is a good sign of conventional potential.

Their tenements are a bit disjointed, would be nice to see them consolidated with another player like MEL so the coverage is better.

They are a penny stock so its risk versus reward. They need working capital as CSG is not cheap to prove up like shallow coal.

I think the Icon announcement (holder) is a big plus for CSG as is the entry of BG / Petronas / Conoco Phillips / Shell / Petro China.... albeit with premium assets.

CSG like it or not is a marginal industry in that development costs are high and profits are based on how well it is done.

I think with all its recent successes it should be trading at a premium to its current price but having said that it will not be the next Arrow any time soon.

Risky but hard to judge fair value with the way its been traded.

Gaz