...and how rude of me, I should have said the article was courtesy of a link posted by Dr Daz which I read over on the MEO thread.
Cheers Pixie.
Some context on the drillers and pipers, there is an article in the Aussie over the weekend about everyone not being happy with the methane bonanza. While I disagree with the article as it does not take into context a lot of other existing infrastructure that dots the landscape like road, transmission lines, rail; but it should pay some homage to the strict water treatment conditions that have been levered on the CSG producers in QLD. This was a major mistake in Wyoming/Montana and water was not managed well - Australia - in particular QLD has done a great job of getting on top of this.
So anyway, to my point was that they were mentioning 30,000 'oil' wells being drilled for the CSG to LNG export. Firstly, I wish they were oil. Secondly, if you consider a ball park figure of 30,000 wells @ $500k each, that is over $15B in revenue. Map that over 20years and the drillers are fighting over $750m worth of drilling contracts. Consider AJL current MC of $192m with one of the biggest rig fleets out there and WDS @ $85m - both have some debt issues - but you get the picture on the high-level potential for these companies.
To me this explains why AJL has come off highs of $7 plus in mid 08. Now, considering FIDS are just around the corner for the first two big cabs off the rank in BG and STO.... not to also mention AOE, but you get the picture.
Cheers,
SF
AOE Price at posting:
$5.20 Sentiment: Buy Disclosure: Held
