gas stocks may lose steam , page-27

Whether or not Newcastle LNG happens in the future is not going to be of any concern to ESG shareholders:

(1) ESG will not exist then
(2) What ESG are doing now, in regard to approvals for Newcastle, is akin to getting council approval for a property development, and then selling it WITH PLANS. No one really believes they will be doing this themselves.

ESG could go it alone, and become the dominant supplier of gas in NSW to the emerging gas-fired power-gen industry. They COULD, and if someone does not approach them with an incredibly generous offer, that is what they will do.

But, to be honest, I don't believe that will happen.

- ESG are in a huge rush to certify reserves and resources, well beyond their commercial need to do so. "quick, quick, let's certify as much as we can, FROM ALL 3 SEAMS to prove the size of our resource." This just doesn't look like the 'staged' development of someone planning to go it alone. Get the reserves and resource up as high as possible, then auction yourself off to the big boys who have the capital and the markets. FOOD CHAIN.
- ESG get a M&A specialist on the board, fresh from one takeover, and then involved with another
- ESG seem to be holding off signing any further commercial agreement, probably for strategic reasons - "you want the gas, make us an offer for the company..."

So, I really can't get that excited one way or the other about Newcastle. One, it isn't the main market for ESG's gas, and two, we won't be around to care.

But, if a bidder wants the gas for export out of Newcastle, and is prepared to pay for it... all the better. There is certainly enough gas in PEL 238.

But I don't think anyone should lose sleep over the spoiling of Newcastle's pristine environment! :)

Y