as of fridays close ggc was capitalised at $682 million. sgl...

as of fridays close ggc was capitalised at $682 million. sgl capitalised at $119 million.

to compare the amount of resources in place for the respective companies there is some research available on their webistes.

qgc to date have been directed towards proving gas reserves at its Berwyndale South and Argyle gas fields. QGC's share of Proved and Probable (2P) gas reserves amounts to 422 PJ (410 bcf), with 2,464 PJ (2.4 Trillion cubic feet) of 3P reserves.

sgl estimates that there are around 63 Trillion cubic feet of gas-in-place within its Sydney Basin acreage.

Recovery factors of 90% have been seen in some high permeability gas fields in the US. For planning purposes, however, Sydney Gas has assumed a conservative gas recovery rate of 63%, which was provided by Cawley Gillespie in their Reserves Report of 2004. Even using these assumed recovery factors, potential gas recovery is significant and ranges from 19 Trillion Cubic Feet to 32 Trillion Cubic Feet, provided that the geological model is consistent across the Sydney Basin.

If so, this could satisfy Sydney's gas requirements for over 100 years at the current rate of consumption.

If SGL can prove up their resources in place to a required level they stand to receive another $50 million from AGL, representing another payment for AGL's 50% share in the joint venture.

So where is the value now! I am far from an expert but i have always had the understanding that SGL's reserves were far superiod to QGC's but fell down largely due to bad management in the past. I now think that poor part of SGL's history is behind them. Babcck & Brown have asserted their authority on the board.

QGC has far surpassed my wildest expectations. I think SGL is an oustanding chance to follow suit, possibly very quickly.