"if one adopts the Purchaser's perspective they pay high $ initially for the early stage share in the resource with the expectation that exploration will prove up more for their money "
Well, actually, the metric paid by BG to acquire all of QGC was higher than their initial stake. So, whilst the price and reserves went up, so had the value. Also, a controlling, operatorship stake is worth much more than a minority holding, for obvious reasons.
The same applies to ESG. 2P and 3P reserves have grown (and a new upgrade is pending). Market conditions have improved. Credit markets have improved. And, perhaps most importantly, the technical risk associated with ESG is much less, due to the highly commercial flow rates.
And as BG have demonstrated, the price they paid for QGC was cheap. The market just didn't realise how much the world and in particular the growth economies of Asia require gas for their energy security.
I sincerely hope Santos do wait. Every day, every single day, ESG's intrinsic price goes up.
Y
ESG Price at posting:
96.0¢ Sentiment: Buy Disclosure: Held
