It is the basin and location that makes ESGs resource and reserves so good.
The coals are deeper than those in QLD, however the setting lends itself to providing an appropriately stressed environment for the production of CSG.
This means that signficant economic benefits can be drawn from the drilling of lateral wells, which are conventionally considered to be a more captial intensive and a necessary measure to make economical a low perm resource.
ESG is running 5 pilots at present in and around PEL238. As far as exploring additional acreage, this is perhaps a little uncecessary at the moment. I guess it could be likened to driling all of MDL372 to be used exclusively for ucg derived syngas production. I agree, an utterly pointless activity as there is no market to support such widescale development.
ESG is firmly fixated on its east coast development. I cannot see the need for them to focus on the SA matters at present. Where they farmed into that area via Sapex(linc)?
The pipeline is not so much of a concern considering there has been a hunter/qld proposal around for some time. An exciting development is the bayswater and lithgow power stations and the possibility they could be CCGT fed from PEL 238.
All the other stuff will come with time and customers. ESG is a growing empire and you dont become king overnight.
I think ESG is going about it the right way, proving they can be king rather than just coming out and stating it, unlike some other ASX listed companies.
Cheers,
SF
ESG Price at posting:
79.5¢ Sentiment: Buy Disclosure: Held
