Dehoots,The relationship between OIP and ESG is quite...

Dehoots,
The relationship between OIP and ESG is quite complicated due to a number of inter-relationships including common shareholders (ESG holds approx 25%, Ingals and Snyder, one of ESG's largest shareholders, is also a substantial from what I understand).
This stems from the fact that OIP was in fact an ESG spin-off structured when ESG was focussing purely on their Gunnedah basin CSG. They placed the surrounding leases (PEL427, 428 and 6) and the Darling Basin leases, which are prospective for conventional gas and oil, into OIP and funded the exploration for these targets as a separate play. It made commercial sense to focus on what they knew about the CSG prospects in their existing leases.
The fact is that the adjacent Gunnedah leases have in fact proved to be prospective for CSG as well as for conventional oil and gas, this has been confirmed by the drilling that ESG has undertaken.
Despite owning these leases, OIP has farmed out its CSG interests back to ESG who has the expertise and track record in drilling and proving up reserves. Once again, this makes good sense as OIP was originally a gas and oil play and it minimised the amount of expenditure OIP would need to commit to explore for CSG in those leases.
ESG and OIP have stated that they believe there could be 3,500 BCF of CSG in the JV leases, PEL 427,428 and 6.
The STO transaction allows us to value this CSG (assuming $0.66 per Gj) and, despite the fact that OIP has considerably diluted its interests in these leases, simple maths demonstrates that OIP is trading at a significant discount to the estimated CSG in those JV leases alone (refer to Hardmano and my previous postings).
Hardman places a value / target of $0.40 per share, I believe it is much higher on the CSG alone, discounting the potential for conventional oil and gas anyway.
Have a look at OIP's announcements for more details.
Good hunting!