most things add up for me.

Entropylord

Thank you for your comments last night and today. Your questions and scepticism sit well with me as a contrarian view should always be considered with any substantial investment. I have a tendancy to see things in rose coloured hues lol.

So far I have tried to fathom the rise and rise of EPG. Imo it had to be European investors buying up the stock until abt 25c to 30c because there was no (and I really mean NO) interest in the KBO/EPG thread on hc till abt then (and I assume hc interest in some ways reflects asx interest or prob vice versa).

In previous posts, I have compared EPG to a combined QGC/SGL entity in Australia, to PVE operating in Northern Italy and in last night's post to some established CBM companies in America noteably Consol Energy, Devon Resources and Western Gas (more on this one later). Allowing for market caps, reserves or reserves estimates and to some degree relative gas prices, EPG as a producer could be valued at anywhere between A$4 and $20 imo. Its easy to say that is drawing a long bow, but imo there are mitigating circumstances, noteably relative gas prices and supply issues.

As best as I can work out, 2005 gas sales prices achieved by the above companies in America ranged from about US$6 to $7.20 per 1000cf. Late last yr (I think) spot European gas prices were US$13 to $18 per 1000cf. Looking at some QGC announcements, it looks like they are selling their initial substantial gas supply contracts at only abt A$2 per 1000cf!! Reported production costs (acquisition, development and operating) for Consol Energy were in the range of US$2.70 to $2.90 per 1000cf.

I am guessing that production costs are similar in Australia, America and Europe. On that basis, American operations are producing good and improving incomes (refer to last night's post), European prospects like EPG look stunning and here in Australia prospects look at best questionable. For Australian operations like QGC, I am anticipating that additional supplies will need to be sold at substantially higher prices for profitable operations.

Rightly so, you query maanagement capabilities of EPG to morph from explorer to producer. Tony McClure of EPG is also a director of Planet Gas (asx PGS) who have at least 5 American projects in varying stages from exploration to near production, one being the East Esponda Indian Creek Project as a 50/50 JV with Western Gas (nyse WGR) mentioned previously in this post. To me, this demonstrates or at least suggests EPG management has exposure to substantially more advanced projects than its current European plays and has relationships with very experienced CBM producers and access to a wide range of consultant and drilling sevices and expertise. Furthermore, Mac Bank have provided an A$8m debt facility to PGS to commence development of PGS's most prospective American assets.

As for how EPG scooped up such apparently good assets in Europe, I dont at this stage know, but I am on the ferret trail as I have had the same thought for months now. It is just feasible that Alan Flavelle, EPG's technical director, is a savvy old school geologist with a nose for a good thing. It also feasible that necessity is the driver of most things and that until recently (say the past few yrs) development of "unconventional gas sources" just wasnt on the radar in Europe. It is also feasible that Enron's previous work in Lorraine was curtailed by fatal flaws at home in America ie not potentially limiting issues with the resource itself. I would welcome others thoughts and efforts on these issues.

Anyway Entropylord, Wiza, Av, Mikayla, anyone else who I have forgotten, oh and you too Macrae12 lol thanks for your efforts to date.

Cheers
poyndexter