mel is totally undervalued and misunderstood, page-92

This is Mr Lincoln Augustus, first second cousin of Holymagiman.

In the light of Santos buying 19.99% of eastern Star, I thought that it would be prudent to repost a couple of the postings that I have made, so that you can understand why Holymagiman and I are so positive on Metgasco’s progress.

We truly believe that it is totally undervalued, just as Eastern Star was this morning. However the Santos raid has turned eastern star trading upside down, and the share will subsequently, and most deservedly, be upgraded seriously.

We believe the same will happen to Metgasco, and those people who keep crying that the market will find its level obviously have no clue how the market operates.
The ‘market’ does not define a share’s price, rather it acts in 20/20 hindsight and plays follow the leader. And the leader in this case will be the company that makes the first move on Metgasco. Maybe Shell, possibly Santos/Petronas. Time will tell.

I remind you all that Metgasco has great potential for coal seam gas AND conventional gas AND POSSIBLY oil. This makes it a most interesting animal, in its own right,

My Posting on 21 June 2009-07-02
Just some thoughts on Metgasco on a warm Saturday night.

It appears, from Eastern Star's latest announcement, that there are plans afoot to ship ESG coal bed methane to Gladstone via the Roma-Gladstone pipeline. Obviously the most practical thing that ESSG can do.

Metgasco is having a pipeline running from Casino to Ipswich. There is already a pipeline connecting Brisbane to the Roma hub. So I would suppose that there is no reason why Metgasco cannot end up as a supplier to the LNG plants in Gladstone.

In my mind, Metgasco is still the most undervalued of all the coal seam gas companies, and sooner or later, people are going to be awakening to this fact. And then it is going to be too late.

All of which makes for interesting possibilities.

And the Riflebird-E15 exploratory well for coal seam gas in the Walloon Coal Measures should be completed and coming up with some good news in the coming week. We are expecting the results to be rather good. So all appears well, and things should be moving along nicely, and the meek who have been unwavering in their belief shall be truly inheriting the world.



My Posting on 22 June 2009
Just sitting here late at night, smoking the smoke and thinking the thoughts. And I thought that I would just pen a few of the thoughts down, before they evaporate into the nothingness of a delicate whiff of smoke.


On 27th May 2009, Metgasco stated that it intended to:-

“Expand Metgasco’s 2P and 3P CSG reserve base by undertaking targeted core drilling in areas identified as priorities.

1. The first well to be drilled in this program is Wyan-E1 which is expected to commence on 28th May, subject to weather conditions. This well is a stratigraphic well designed to test coal development on the western margins of the Clarence Moreton Basin, in northern NSW. “

RESULT:= WYAN-E1 has recorded FREE GAS FLOW of 175,000 standard cubic feet per day.


2, “Following this, Metgasco expects to drill Riflebird-E15 as a LOW COST vertical well to test the production potential of a multi seam CSG well. Riflebird-E15 is intended to subsequently be completed as the vertical offtake for a future horizontal CSG pilot well.

RESULT:- The Walloon Coal Measures were intersected at the predicted depth WITH A NUMBER OF COAL SEAMS present at this location.

A short term flow test was conducted immediately after reaching total depth and IMMEDIATE gas flows to surface were observed. The well is now being set up to run a long term production test over the coming weeks.

There are two things to bear in mind about Riflebird-E15

a. It is a low cost well
b. the report does not mention anything about dewatering being necessary, and the fact that there were IMMEDIATE gas flows to the surface is very very exciting.



3. “Metgasco is currently finalising the drilling rig contract for the drilling of our first conventional appraisal well Kingfisher-E1 on the Kingfisher gas field. This well is expected to be drilled in the next quarter. Kingfisher-E1 will be drilled to a total depth of 2,100 metres and will evaluate the Heifer Creek, Gatton and Ripley Road sandstones. Metgasco has a contingent resource estimate of 41 PJ (P Mean-Base Case) for the Heifer Creek and an upside case of 914 PJ (P10 – Upside Case) for the total structure.”

Previously, Metgasco have referred to Kingfisher and said:-
"..Kingfisher discovery announced in September 2008. Kingfisher well terminated at 1296 metres because we reached a hookload of 95,000 on the rig (limit of hookload was 100,000 lb). We believe that we have just touched the tiger by the tail, and we can see that the full section looks very very interesting, and we will anticipate that when we come back to drill this area we will be able to penetrate the full section and we will be able to get a look at the deeper units which include the equivalent of the precipice sandstones which is a major producer in Surat."

The question is “major producer of what?”

I refer you to this :-

Petroleum
The GAB contains the largest onshore oil and gas reserves in Australia. There are two producing provinces in the Surat basin and three in the Eromanga, the dominant producer. The Precipice and Hutton Sandstones are the main reservoirs rocks in the GAB sequence (GABCC, 1998). Many of the oilfields have been developed for more than ten years with production now in decline. With no new discoveries, oil production is expected to cease within the next 50 years. In addition, the petroleum industry is a small but significant user of GAB groundwater. There also exist possible economic coal seams, although only one mine is operating at present (GABCC, 1998). Habermehl (2002) suggests that hydrocarbon source and reservoir rocks are abundant in the Mesozoic sequence and notes that commercial and sub-commercial oil and gas discoveries have been made in several Jurassic and Cretaceous sandstones (and in underlying Permian and Triassic basin sediments) and that these findings contradict earlier beliefs that the basin-wide groundwater flow had flushed hydrocarbons out of the system.

I also remind you that in his Radio Broadcast in May 2009, Mr Johnson mentioned that there were possible LIQUIDS (CONDENSATE, OIL) deeper in the system.

My reading of this is that the Kingfisher-E1 well will be drilled in the July to September quarter, and while it is being drilled for conventional gas, I hold my breath and hope for much much more than that. I presume that Metgasco is holding its breath too.


4. The next generation of CSG pilot wells are planned to be drilled in the second half of this calendar year. ADDITIONAL RESERVE EXPANSION DRILLING will follow on from this program.

All in all, I feel that this has been a most encouraging series of reports. Metgasco appears to be one of the few companies that has coal seam gas prospects, conventional gas prospects and the prospect for onshore oil as well. Time will tell.

I have to admit that I have bought a few more of these shares in the last few days, and now have sixty one, which is a very good holding by anyone’s standards. Holymagiman has bought a few more too, and so has Uncle Tobias.

Blessing of the Lord
MLA