santos valuing reserves at $9/gj

Hope BOF reads the Australian. A lot more than the cents per GJ the market is ascribing to our reserves. 2015 is right about the next NSW election.

"SANTOS says it is so confident Australian east coast gas prices will rise that it is using prices close to $9 a gigajoule - which is two or three times current gas prices - to assess its gas reserves.

Chief financial officer Andrew Seaton said the company was very comfortable internally that gas prices would rise to its publicly stated forecast of between $6 and $9 a gigajoule beyond 2015 when three big liquefied natural gas projects in Gladstone start sucking up most of the east coast's gas.

"We use a gas price towards the upper end of that range," Mr Seaton said.

"We're seeing evidence in the market already that prices are being signed in that range."

The Australian recently reported Origin Energy sold miner MMG gas at a price that rises to $9 a gigajoule once the LNG plants are up and going.

Neither Origin nor MMG has confirmed or denied the price."