you may find that a rival would request ESG to 'open' their books and would do their due diligence. This will include ESG providing some data on flow rates etc where these groups would be able to estimate what a reserve upgrade may be.
I would love a rival bid, however, I very much doubt this will be the case.
I personally think this is going to come down to STO. The worst thing would be for STO to simply sit on their 20% stake and take their time (ie. 2 yrs down the road) and then make a bid. With capital raisings, dilution etc, it may very well be that ESG shareholders do not get a great deal more in the offer.
So, I'm hoping we see a very strong upgrade and STO continues to use the same metric on reserves to determine the offer. I think this is how it will play out. STO could not possibly expect ESG shareholders to agree to an offer based on a smaller reserve base.
If we do not see a significant upgrade in our reserves, well i would take it that manegemnt have dropped the ball and cost shareholders dearly.
I noticed we are really chewing through the cash, now down to $55m. Didn't we have $120m+ last year? Sure, $20m was for the land purchase, however, I would like to know where the other $50m+. There needs to be something to show for it. And i dont want management to come back cap in hand asking for more.
So, my view is that STO have done us shareholders a favour in a way. For DC to be obliging, he must be aware that STO will offer more based on the upgrade (and keep us all happy), or that he is finding it alot more difficult to gain traction and support for Newcastle.
Anyway, they are my thoughts only. We didn't see $2+, and we wont see it. The times they are a changin'
ESG Price at posting:
88.5¢ Sentiment: Hold Disclosure: Held
