"the announcement", page-9

denis, yaq, tedyoh et al

I wish I knew what will be announced but in some ways it matters not what is announced ... just that there IS an announcement!!

If you work thru the logics of this situation it can be concluded that there have been a large number of "hints" in ESG's previous releases and interviews with Casey about their development plans (the 4 stages), the fact that all 4 stages are being pursued simultaneously, that LNG is feasible out of Newcastle and that they have the quantum of reserves to achieve this, and that they have no doubt that there is a sufficient market for the project to reach its "full potential" (and that's large!!). Casey last week said that submission of the part 3A development concept had been delayed so as to consult with stakeholders. And then last week he put out a direct challenge to Santos to be involved ... otherwise ESG can go it alone (by that I interpret him to mean without Santos but WITH another partner .. like BG or Shell). You would have to be naive to think that ESG has not been appraoched by or in discussions with other companies about the future of their gas.

So .... news on the development plan has been "imminent" for some time and if I were to have to speculate on the game changing news that is being anticipated that would be it. That is not to say however that this news will be announced AHEAD of the SPP closing date. I believe that the SPP is a genuine attempt to "do the right thing" by shareholders (instead of a placement), but it won't be much of a reward for loyalty unless it is an "in-the-money" offer .. so ... I do expect some news next week. The most likely IMHO is flow data from the laterals that meets market expectations (considerably higher than previously) .. they will have nearly 4 weeks data by now. There's an outside chance I reckon that reserves would be upgraded at the same time .. its more likley in Decemeber .. once again IMHO.

If there is no earth shattering news next week and the SPP fails to raise a lot of cash then that will not be a drama given that after the reserves are upgraded and commercialisation news is released (whenever that might be) we should see a significant rerating and then funds can be raised at a higher price ... but DON'T expect it to be a SPP next time!!

H