p 26 fin review - possible bidding war for esg, page-18

About two years ago the acquisitions in the CSG sector started to heat up, as some majors were outbidding each other for more reserves. Prices paid had an average metric of around $2.75/GJ.

The world has since become more aware, due to the Copenhagen meetings and other factors, that it is not a good look to start building more coal fired power stations and look for alternatives, such as Sun & Wind power, Nuclear power and more accessible for the interim period, GAS instead.

The gas glut preachers have been trying to downplay the increasing interest in gas.
Who knows, they were a lobby group themselves, with interests in other resources.
China alone requires increasingly more gas, as their 3% of gas powered plants will be increased to 15% by 2020, if I remember correctly.

So one to two years ago, the average metric was $2.75/GJ.
I know, metrics is not what majors are looking at. They look at their required needs and who has that quantity they are after.
The time is running out for some of them, as in my view, there are not enough 2P or 3P proven reserves for everyone requirements yet.
Today there are less candidates available to be taken over with enough reserves to justify the needs of some majors.
If Santos/Petronas is successful in acquiring ESG, than BG and others have to go and find smaller players to satisfy their reserves requirements.

Thinking along these lines, I can only conclude, that ESG is sitting very pretty atm. And if there will be multiple bidders for ESG as per my thinking before, the price will go up accordingly.

The final metric might surprise a few of us, as the gas demand for 2015 and beyond has certainly not decreased two years later.