email from qgc

Having a large holding in QGC I would be grateful if you could give me a few minutes of your time to answer a few questions.



First one is what price is QGC selling there gas at per 1000cf?



What is QGC's average drilling and maintenance costs per well?



There is a bit of apprehension about production costs, what is your complete cost per unit? And is QGC using the most advanced technology available to extract the gas at the cheapest rate?



Because of such low gas prices in Australia how can OSHs purposed PNG pipeline going to be viable? If this project does go ahead how will it affect the CSM industry in the eastern states and why is the government letting this happen when there is already vast gas reserves in domestic areas not to mention environment issues etc?



I thought it was irresponsible for SGL directors not to come to the table or even return calls when you invited them to do so. There is a fair chance that if they did then the takeover process would be more advanced not to mention saving money and time. In SGLs defence it was a hostile bid, I wouldn't mind hearing your comments on why SGL should have met with QGC seeing as it was a hostile bid in the first place.



Last one did QGC contact SGL before the bid was made to SGL shareholders?










I will endeavour to answer your questions:



Price of gas: you will appreciate that this is very commercially sensitive information, and as much as we would like to discuss it, it would be imprudent to do so. Be assured that QGC is endeavouring to achieve solid contracts that will give shareholders both return and growth.
Capex and Opex: I ma afraid the same comments apply. QGC believes that it is developing and operating its gasfields in a highly cost effective and competitive manner, and that the shareholders will be the beneficiaries of this management.
We share your sentiments on PNG.
Your comments on the SGL bid are appropriate. There is still a way to go. Be assured, QGC has imposed a comprehensive list of defeating conditions, to address either “unknowns” that may emerge, or steps that SGL may take that devalue the share value.
Contact was made on the day the offer was submitted. This was reported to the ASX on that day – 20 January.


Please feel free to contact me for further queries.



All the best.



Peter Jans

General Counsel & Company Secretary

QUEENSLAND GAS COMPANY LIMITED

Phone: 07 3004 1016

Mobile: 0412 370 005