keep your eye on the prize

ESG will not be sold for a valuation of $972M

It will be sold for substantially more IMHO

Congrats to all holders who stuck their necks out against the will of some who are still even at this important occasion doing victory laps on behalf of Santos

Do not be fooled into thinking that $0.50/gj 3p of historical reserves is enough to take ESG off the market

Personally I would be happy to take STO scrip as that is the reason I bought ESG in the first place.. the question for me was always how much STO/cash am I going to get in the final transaction

Hardmano has also thought along these lines and suggests he would prefer 1 for 10..if we take 1 for 10 at todays STO close we are looking at a T/O price of AUS$1.27p/s or approx AUS$1.3B valuation..

Now to me, that would still be a steal for STO..

Why?

Lets do the sums (approx)

ESG cash $50M

ESG reserves upgrade conservative
50% 3p increase = 2727 pj 3p (net)
at $0.50/gj 3p would be approx $1.36B valuation

so all up, a conservative valuation of AUS$1.41B

even if STO end up paying AUS$1.41B for ESG in the form of scrip at a measly (approx) 1 for 10 it will still be a bargain

the final transaction will not be about vwap and 40% the final transaction will be about what premium STO or indeed another suitor are prepared to pay for reserves that they did not have to pay to produce...a simple transfer of numbers onto an investor presentation..think about it...how good would it look to STOs next hong kong preso to have 3p reserves magically increase by over 3000! (their 35% plus aquired 65%
this is what the big game is about..the global race to lock in reserves and customers in order to secure funding to proceed with $16B projects..

either way holders will be the winner even if sold to Santos for a $1.41B song by the time STO hit $28 ?ior dare i say it, get taken out for a lot more) again they will forget about their dear old ESG

majors watching from the sidelines will laugh at this offer and probably bid just to ensure that STO does not get away with it too cheaply

DYOR