JPM's comments on transaction comparisons and expectations are...

JPM's comments on transaction comparisons and expectations are interesting also:

"Transaction comps (page 19)

The Australian CSG to LNG space saw a flurry of M&A activity driven by an influx of foreign players in 2007-2010. Below we have summarised the purchase prices
based upon multiples of 2P and 3P reserves, and applied them to ESG?s PEL238 to imply a value for ESG shares. However we note the ranges are wide and reflect some
high prices we think would not be achieved today. We think a sensible transaction multiple for ESG is roughly A$1.00/GJ 2P or A$0.60/GJ 3P, which equates to an
equity value A$1.10-1.20/share."

Comments: Sensibly they say we won't achieve the peak metrics of several years ago. But their $1.10-$1.20 transaction valuation is based on current 2P and 3P reserves. So if we assume the size of reseve increase they expect then we are looking at more like $1.70-$2.00. Of course we have to get the reserves upgrade of that size and then get a share price well over $1.00 to have ANY chance of these metrics being antwhere near to reality.

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