gas stocks may lose steam

This one for mangles (or is that a bit too familiar?):

Published in Eureka Report today is an article titled "Gas stocks may lose steam" - Mike Hawkins, which comes on top of a stream of discouraging media items triggered by the Macquarie report which ended up as front page news in the AFR.

Hawkins reports that

1. energy stocks P/E are overvalued in Australia (compared to rest of world)

2. "The worlds remaining resources of natural gas are easily large enough to cover any conceivable rate of demand increase through to 2030 and well beyond"

3. The unexpected boom in US unconventional gas production, together with the depressive impact of the recession on demand, is expected to contribute to an acute glut of gas supply in the next few years."

which is basically what has been reported already (not that I find the modest growth projections by the International Energy Agency very plausible).

However he does say that "There is little risk that these projects will not proceed (although rationalisation of the five coal seam gas projects in Queensland seems inevitable)", so the future ESG price is probably (as you all have been saying anyway) tied up with the likelihood of a takeover. ESG, after all, is worthless unless somebody actually wants to buy it.

However, I did notice that Santos is listed (in the AFR article) as a 75% chance of proceeding with the LNG terminal in Queensland, which was higher probability than any other operator.

Given that the resource upgrade may see ESG as a much bigger resource, we may find that ESG may well be included in that rationalisation.