Hi Sotirib, I've regarded CSG as a bit of a fad for quite some time. Bit like uranium was. Caused lots of people to get excited but I wondered about the sustainability (short term)... Sure in another 20 - 50 years it may be an extremely valuable resource but with Oil back to more normal price levels it is just not as attractive as it was when oil prices peaked.
The other thing which I haven't seen anyone mention is the detrimental effect that the strong aussie dollar has on profits. When the Aussie dollar was around 60c (or lower) US, and oil is priced in US $ per barrel aussie oil companies got a big benefit, at almost parity theoretically they should be making significantly less... However not everything adds up... I'm yet to do the numbers, but It would be very interesting to see what the cost per barrel was (in AU $) at the peak of the oil price run up, and what the cost per litre of petrol was and then compare that to the situation now... I think that for the last two years the fuel companies have been making a killing, not passing on the drops that occured due to the dual factors of a massive drop in oil price, and a continually strengthening aussie dollar.
Tony.
VPE Price at posting:
34.0¢ Sentiment: Hold Disclosure: Held
