If the CSG market was limited to domestic usage there would be serious questions regarding the commercialisation of various leases. As you note Anglo may be in that situation.
The game has moved on and the energy majors see these gas resources from several points of view. Firstly, CSG has about half the carbon footprint to coal per unit of energy output. CSG is an excellent fuel to meet carbon limits.
Secondly one of the key metrics for large energy companies is the BOE in their published reserve/resource figures. As noted recently in the Australian LNG is competitive at $US50 per barrel and can be booked whereas large energy storages such as oil sands drop out. In fact many energy projects requiring higher prices have stopped leaving a future supply hole that LNG can fill.
An alternative with a good greenhouse profile and the ability to supply base load such as nuclear take around 10 years to permit and build and require huge amounts of capital that simply is not available. Thus new LNG sources should have a faster path to monetisation that new uranium resources.
BG in marketing its future LNG production knows that users want a high reserve position to guarantee supply. BG is planning for a 30 year project life and will grab all the resources it can. As in the PES case it will bid enough to push established shareholders to sell.
The preferred leases sholud be positioned near other BG [or similiar company] leases and pipelines to optimise field development.
At around a cap of $60 million with say $25 million of cash WCL is defintely in the mix. As well the latest data on areas such as Bald Hill offers upside.
WCL Price at posting:
48.9¢ Sentiment: Hold Disclosure: Held
