Bundy,I am not fussed or scared by the idea that a NO VOTE gets...

Bundy,

I am not fussed or scared by the idea that a NO VOTE gets up and the price drops. Volatility is something we have got very used to.

But my investment proposition for ESG remains the same as it always was:

- ESG is in a growth sector (gas), with rising domestic and LNG demand
- The majors are short of gas
- ESG and other CSG companies gain value as they prove up more reserves
- And more value is gained when these CSG companies go up the foodchain. The aim of all these companies is not become a large producer, but to extract the maximum dollars out of the big players.

Who among can can honestly say they are passionate about us becoming an LNG producer? Really? Surely everyone who holds ESG wants to sell ourselves to the majors. (So, when I hear companies going through the motions, like MEL talking about LNG in 2019, I laugh. 2019? Who are they kidding? As if MEL will exist in 2019! All part of the game.)

The aim of every successful junior resource company is ultimately to sell themselves, at some stage, for as high price as possible, to the big end of town.

So, the argument about ESG is all about price. Not IF ESG should be sold up the foodchain (of course it should) but TO WHOM, WHEN and at WHAT PRICE.

If ESG put themselves out for sale, if they seemingly agree to a merger with Santos and will be sold, the ball is in the court of other players. Other players have the choice to either intervene (if they are prepared to outbid Santos), or forever hold their peace.

But the question I have for everyone who advocates a no vote, is, IF no other party intervenes, if no major is prepared to pay more than $900m now, then WHY are they not prepared to intervene?

If the quality of the resource is there, and the demand is there, other parties will trump the Santos agreement. If not, then they won't. It is as simple as that.

So, I am rather sanguine about ESG and this deal. If other major companies see the value and are prepared to interveneand pay more than the Santos deal, great! - it validates our investment proposition. If however, when push comes to shove, no one is prepared to unseat Santos, then I see no value in going back to the drawing board for more of the same. Because, the aim of the game if to extract the maximum dollars out of the majors. And if those majors (after having seen the data) are prepared to let ESG go, then to whom would we sell ourselves later on?

The market can misprice assets in the short to medium term. But the market for companies like ESG has always been the majors. Not retail investors, and not instos with quarterly time frames. In the end, the majors, in a competitive environment, are the market for companies like ESG.

We have put ourselves out there for sale to the majors. After that... well, I will abide by the decision of 'the market'.

Yaq