consolidation pattern, page-3

Lindo,

ESG looks to me to be trending upwards atm.

I agree the sp has stagnated a bit in recent months but I think that also had to do with the need to raise more funds.

I think that funds raised have been assigned very carefully and strategically and I expect to see this starting to reflect in the sp very soon.

The ramping up of exploration activities at PEL 238 is a very encouraging sign, the full impact of which the market has not yet factored into the sp. Their upgraded target of proving up 200PJ of 2P reserves by end 07 is fantastic! And their 2P target for end 2008 is 600PJ!

The co has also worked very hard at marketing their gas, with the most significant agreement (MOU) being with Macquarie Generation for up to 500PJ of gas.

ESG has the distinct advantage of no current gas production in NSW where it's PEL's are located. Yet NSW currently consumes 117PJ of gas / annum and this is likely to increase as gas production commences in the State.

I think we will see some significant re-rating of this stock in the coming months. Possibly even a takeover bid as bigger players seek to get a slice of the action in NSW.

As I've said before, I think the ESG management is top class and doing a very good job. It's one thing to successfully find gas, it's another to effectively manage your exploration program and also work on marketing your product. Imo ESG has done exceedingly well in all three.

Hang on to this stock - imo it's very valuable!