holy!, page-2

I know we all deeply missing Holy
Just to Entertain You All......................This is the last message from holy to exit ESG and come to MEL!


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Baboo Ram Runchik:
Mr Lincoln, what are your feelings towards Metgasco and Eastern Star? Does the family like them both still?

Mr Lincoln Augustus:
That is indeed a very pertinent question. I must admit that the the family is getting very negative towards Eastern Star.

BRR:
Does that imply that you are getting very positive to Metgasco?

MLA:
Yes

BRR:
What is your problem with Eastern Star?

MLA:
Firstly the problem of water and its disposal. That appears to be a big problem.

BRR:
But they said at the AGM that the problems are all under control, and all the water can be purified.

MLA:
Well, BRR, first they told us that they needed shield wells. We scratched our heads and accepted that. Now they tell us that they have to put two big pumps into those shields. What next?

BRR:
So they will put the pumps and pump the water out..no problem.

MLA:
On page 19 of the Annual Report, the company says that it has capabilities to treat 3.2 Megalitres of water per day. That is 20,000 barrels of water every day. That is a lot of water.

And that is for now. What happens when production is ramped up, we wonder? Will 20,000 barrels of water be all that is produced then? Or more? And if the volume of water produced is much more, will there be adequate treatment facilities to cope with all the water?

And what is it going to do to the water tables? We think that that is a lot of water over a large area and if there should be any breaks in those so called impervious layers of rock anywhere, then the top layer of water is going to start flowing to the bottom layer as the bottom layer is drained....just our thoughts and so it is nothing to really worry about.

If this water issue keeps going on there is sure going to be greater angst among the farmers. and one cannot just block their legitimate complaints off as being irrelevent, not in this current day and age.

So it appears to us that Eastern star will have to factor in a fair sum of money for remedial processes and for compensation to those farmers. after all, money buys out most complainers....but not all, for some are complaining not for money but because they see a life style vanishing.

BRR:
Hmmmmm....?? And what about Metgasco?

MLA:
They have a dry coal seam situation, and the Clarence Morton Basin appears to be a second Horseshoe Canyon. There is little water being produced and the gas produced is almost pure methane, so that makes it a double plus, in our books.

BRR:
Eastern Star have flow rates of 900,000 scfd from the Bibblewindi multi-lateral pilot and 2,000,000 scfd from Bibblewindi West pilot. Is that not impressive?

MLA:
May be inpressive to you but the family feels that they would have liked to see better figures to make them happy.

BRR:
So you are not happy?

MLA:
Well, are you happy?

BRR:
Hmmmmm. Well, what about Metgasco's flows?

MLA:
Well, when simple vertical wells like Thornbill E01 flow 100,000 scfd, with no water production, we sit up and take notice.

And when Kingfisher flows 2.900,000 scfd from just one section, with multiple untested kicks and a deeper zone to be tested, we sit up and take even more notice.

And I guess when those results of Thornbill E02 come out, we will probably levitate in the air and take more notice, and that will be a fact.

BRR:
Eastern Star has 2P reserves of 1520 PJ and 3P reserves of 2797PJ. Metgasco has 2P reserves of 397 PJ and 3P reserves of 2239 PJ. So Eastern Star has more reserves. What do you say to that?

MLA:
We stress that this is just our thoughts, but we wonder what proving lots and lots of reserves is really going to achieve, if firstly, there are water problems during extraction and secondly, we can see no real end use for the reserves.

BRR:
But they are going to send the gas to Gladstone and they are going to send the gas to Newcastle and they are going to do all sorts of things. There are MOUs all over the place.

MLA:
We always like to see things happen rather than hear of them going to happen. Sort of like once biting, two times biting, as the Queens English always says. So companies always look forward and make forward assumptions and hope everything comes good, but they have disclaimers in case things go out of whack. So we got to read the disclaimers and understand them fully before we get too carried away.

And MOUs are just MOUs till they are not MOUs. And sometimes a mouse remains a mouse, however much we try to make it grow into a big fat rat. And Holynagiman will tell you how hard it is sometimes to catch a particular mouse in his fields when we want to.

Again, just our gut feeling, and we could very well be wrong but we are beginning to think that Eastern Star has gas which is kind of stranded at the moment.

BRR:
Um.....and what about Metgasco?

MLA:
Well, they have got the Lions Way Pipeline in focus, and that is only about 100 km. So for about $100 million, they will be connected up to the Brisbane-Roma pipeline. And immediately they will have a customer from LNG Ltd for their LNG plant on Curtis Island, so Metgasco is not stranded.

Or if Metgasco decides to go down the route of Flex, they have to go about 100 km east to the coast, so again, for about the same costs, they are not stranded.

And that FLEX idea is not so silly now, not after Shell has decided to go ahead with their offshore LNG facilities.

BRR:
But I am looking at all those reserves that Eastern Star has and I am most impressed. And they are promising us that they will produce more.

MLA:
Yes, they are impressive reserves all right, and they would look a lot better if they had somewhere to go. But we do not understand the purpose of Eastern Star continuing to prove more and more reserves. We would have liked to have seen something happening that would have reassured us more that all that gas is going to go trouble free some where.

Metgasco's 2P reserves are at present less, but we feel that Metgasco is not trying to upgrade reserves anymore, as they have proven up enough to take them a long long way. Metgasco was talking of having enough gas to producem 3 mtpa of LNG for 20 years.

Now, 1 mtpa = 60 PJ/yr, so 3 mpta = 180 PJ/yr and so, in 20 years, the total PJ needed will be 3600PJ. At present, from PEL 16 alone, and in coal seam gas alone, the 2P +3P reserves for Metgasco are 2636PJ....so why would they need to go and spend more money proving up reserves??

They have enough for their projected needs and that is not even starting to talk about the conventional reserves...we feel that there are some relly big monsters sitting there. metgasco has got its seismics going to investigate Kingfisher, so it will be an interesting few months ahead.


BRR:
Everyone is very excited that Santos has 19.9% of Eastern Star and will soon do a overtake or something

MLA:
Alvin the Idiot was read the parable about the poisoned chalice at Sunday School last Monday.

BRR:
Yes, those chair lices in the Sunday School chairs are quite poisonous and we must do something about them. All them kids itching and scratching around while they are receiving the Communion wafers is very off-putting.

MLA:
Chalice, not chair lice.

BRR:
Ok, but those chair lice are a problem too. Are you saying that Santos could have some lice on the big fish that was swimming by?

MLA:
Something like that, but who knows....fish have all sorts of bugs and Johnson James died of ciguatera poisoning, bless his soul, it was only last Easter. So sudden it was too. Anyway, Alvin the Idiot knows all about poisoned chalices now, and he always cleans his drinking mug..

BRR:
What about the Boards...?

MLA:
Metgasco appears to have got a very strong board that looks like it wants to go places. that latest appointment of Peter Henderson is very good news to us as it frees up David Johnson to do what he is really good at doing. Horses for courses, and all running the same way

MLA:
Some people feel that the family are ramping the companies up and down for their own benefit, and that you should not change your mind about Eastern Starfrom what you said before, about the monkeys and gorillas and goats etc

MLA:
It is a free country and I think are entitled to change our thoughts at any time, any minute, any second, because time does not stand still. So if someone is disgruntled that we have changed our call, well we are sorry we upset them.. Really.

We do not want to be the last to leave the building at any time, because we get afraid of the dark if we have to turn out the lights on the way out. There's been many shareholders who have found out the hard way that the shares have owned them rather than they owning the shares. and in such a circumstance, one is unable to make a dispassionate decision.

And those who wish to stay should stay because it is just possible that a takeover of Eastern Star could occur soon, and that will be tough luck for us and very good luck to them. But such is life and one cannot worry too much.

But we have caught the elevator down and are on our way out.

BRR:
Could it be possible that you will say the same thing about Metgasco in a couple of months?

MLA:
Who knows, who can tell? All we can say is that at the moment, we are very comfortable and happy with Metgasco.

But if we should note trouble brewing on the horizon, or if we get a funny gut feeling that things are not right, then we will reassess the situation in the cold light of days with no over-riding sentiments to cloud our judgement.

BRR:
We have to end this interview now, any last words of advice to the brothers and sisters?

MLA:
Well, we have got a special on for Jamaica Numba Three this week-end, but it is not so good as the real Numba One. The Jamaica Numba One is not on sale so you have to pay full price, but you got to pay for the quality. Guess I had better be giving everyone the blessing of the Lord.

BRR:
Well, thank you for coming for this interview. I will see you to the lifts so that you can take the lift down, as there are a lot of steps to go down.

I will press that Thumbs Down button a few times to make the lift come faster.

MLA:
Thank you very much for that.
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A family of Number One dopes. Thoughts expressed here have far less substance than the swirling smoke of a Numba One.

Cheers
Holy


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