price - value??

Lead story in the Business section of today's The Australian, finally announces the price that Origin has just signed up for sale of gas to a local user.

As I indicated in a previous post, it really is a piddling contract, 22PJ over 7 years worth around $200 million.
BUT, they have been paid $9 gigajoule and the article says that that compares with the current spot price for gas in Asia of $16 gig.

Now all I am posting is an extrapolation of THOSE numbers to put people into context with what ICN's GSA could be worth. NO personal opinion, just arithmetic.

ICN's GSA is for the equivalent of 2,200PJs over 20 years.
That is 100 times the Origin GSA.

At the East Coast price that Origin got, that translates to 100 times $200 million, or, $20,000,000,000.

At the Asian spot price of $16 gig. it translates to $35,000,000,000. That's just about EXACTLY the value that Ray James put on our GSA when he announced it and all the "experts", many on this forum, laughted at him.

Now, ICN has an Issued Capital of just 533 million shares.

IF we just stick to the $9gig, $20,000,000,000 over 20 years is $1,000,000,000 P.A. (Divided by 533 million ??)

The $16 gig. over 20 years = $1,650,000,000 P.A. (Divided by 533 Million =??)

Re "value of 855" that someone asked the other day.

For the gas that is in 855, Ray James is claiming a "conservative" 20TCF with ICN's share being 8TCF.

That 2,200PJ's equates to 2.2TCF ($20-$35 Billion).

We will still have 5.8TCF left to sell, "conservatively".!!

He says "conservatively" as the U.S. E.I.A. report believes that the recovery rate will be 25% and Beach and ICN state that there could be as much as 300TCF in 855 and a recovery rate of 25% would provide 75TCf and ICN's 40% share would be 30TCF (not 8TCF). What would the sums be then??

Before anyone jumps down my throat, these are obviously GROSS numbers with all the usual costs to come out for any gas exploration, development, and all other costs, but, the Origin numbers finally gives us some REAL numbers that we have been waiting for for so long, and the article reckons that the price will go up.

I somehow don't think we will see another ADE steal with ICN!!!!