The agreement with STO is for 68TJ/day & the are only producing...

The agreement with STO is for 68TJ/day & the are only producing half of that. The pipeline has a capacity of 92TJ/day. The flowrate for Oct. is now 233.1 TJ/day.

I am assuming all this 233 TJ came from LT & not Santos's PB field. The key variable is the daily price of gas.

Here are some avg weekly prices, as a rough guide, for the first 3 weeks in Oct.

Week ending 3/11/09: $2.65/GJ,
10th Oct: $2.95/GJ,
17 Oct: $2.02/GJ.

So if one were to use an average price of $2.54/GJ, for 233.1 TJ, we are looking at roughly $592k in gross revenue (pre-tax ie). Not bad.

Here's looking to another solid 61 days of production for Nov-Dec, so they may generate 61*34TJ*$2.50 = A$5.185m gross.

Now that's big. Unless, ofcourse they bump by production to 40TJ+/day. For now, its safe to assume 34TJ/day as a base case. Only 2 variables in this for now (weekly gas price & flowrate, simple as that).

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In their recent quarterly, they r looking at revising figures LT field by adding estimates from Garfish. Primary target at Garfish-1 was water bearing, but the stacked Admiral sands from LT extend into Garfish & were gas bearing, so IMHO, the reserves for LT will change from 450PJ to mayb another 150-180 bcf, by my estimates. So the overall LT/GarF field reserves could b around 600-630 PJ. We have to wait for the official figures.

Now NXS has agreed to sell 350PJ out of the current 450PJ, to STO. Any surplus reserves can b sold to another buyer.

With the management in no rush at all & if u have loads of patience, logic says that SP should move upwards. How much we dont know?

I'm totally stumped by the SP capping at 41c twice in 2 months, so it has to b a cosmic event of epic proportions to move their SP north of 50c+.

Buy on any dips, as the experts say. By all means, please use y'r judgement/gutfeel/mkt risk-factors etc, while entering or exiting any stock.

Now I wonder, how Myers IPO listing will go today!!