At the very least, there should be some guidance about the reserves 'assessment'. Some shareholders think that there could be a reserves decrease. Other think that there will be a large increase. And this is absolutely central to the value of ESG, and the question of whether this deal is fair and reasonable.
That there should be so much uncertainty amongst ESG shareholders as to fundamental questions like 'how much gas is there NOW', 'do we have an LNG market for our gas or not', and 'are our reserves going to go up or down' is an indictment on ESG's governance and communication. It shouldn't be like this - not even for strategic reasons. The ends do not justify the means.
If technically things were going poorly at BW and BW West and this was going to have reserves implications, the market should be made aware. If the company expects a 'material' reserves upgrade, the market should be made aware of this. For a company without cashflow, this is essential for an informed market. Put it this way - if ESG were a company whose financial performance was significantly different from what the market has reason to believe, an announcement would be expected - 'market guidance'. So where is the 'market guidance' on the issue of reserves? The market, especially retail shareholders, are completely in the dark.
We do not even have a reserves target. So how can shareholders make an informed judgement? They can't.
Little wonder so many ESG holders are uncertain - 'the market', (or sections of the market) is operating in a complete information vacuum. It is not a situation that should be allowed to occur, particular as this 'deal' seems at odds with public statements about value and technical progress made by ESG in relatively recent times.
ESG really shouldn't be trading in such a situation.
Yaq
ESG Price at posting:
79.0¢ Sentiment: Hold Disclosure: Held
