"......... and if it breaks down ... well ummmmmmm !!!!"well I...

"......... and if it breaks down ... well ummmmmmm !!!!"



well I would be buying any dips :-)

This company is in such a good position that it can afford to hold back production and bank the gas so it can sell it in coming years for a higher price.

Sydney Morning Herald
"After reporting a maiden half-year profit of $22.1 million, Queensland Gas said it would sell 23 petajoules of coal-seam gas this year rather than its initial 30-petajoule target. It added that production targets for the two following years might be downgraded following a review.

The Queensland Gas managing director, Richard Cottee, said the company was limiting its domestic sales to focus on future higher-value LNG sales. "We are going for value, not volume," he said. "We are not entering into any further long-term sales contracts."

Cheers

Queensland Gas recently signed a joint venture deal with Britain's BG Group to develop the $8 billion project, which could be in production by 2014. Santos is planning a similar project. Mr Cottee agreed with recent comments by Santos's managing director, John Ellice-Flint, that it would make sense to combine the projects at a later date. "I think there would be enormous economic utility in sharing infrastructure," Mr Cottee said. "I always take the view you never get between a capitalist and a bucket of money. Money will talk."

Mr Cottee said some of Queensland Gas's new wells being developed in the meantime would be de-watered and then shut in to allow the company to obtain higher LNG prices at a later date.

"There is no requirement for forced sales of our gas [to the domestic market]," he said. "We have faith we can meet the LNG target without causing a glut of gas in the interim."

Mr Cottee said Queensland Gas would continue to grow the amount of production sold into the domestic market and was targeting 140 petajoules a year of export sales and 70 petajoules a year of domestic sales in 2013.

Queensland Gas doubled its sales in the half year ended December 31 compared with the same period a year earlier and received 12 per cent more per unit sold.

An analyst with ABN Amro Morgans, Chris Brown, said the company had maintained low lifting and compression costs, making it a good margin business.

"I think without a doubt it is the leading coal-seam gas player in terms of the quality of the resource and the level of understanding and development of the fields," he said. "We still have a valuation [$4.59] comfortably above the current share price."

Mr Brown said it made sense to shut in production rather than sell more gas into the lower-priced domestic market. "It's a depleting resource - the more gas you produce, the less you have. The question is why sell it cheaply if you don't have to?" Queensland Gas shares closed 4c lower at $4.21.