Quite some months ago I put a question to the forum to the effect that the mangt of ESG had a performance condition attached to the 2009 upgrade which was linked to a swag of cheap shares - of course, it came in and the shares were duly delivered.
In my post I pondered whether the next upgrade (which has still not landed) would have been in the bag if a similar agreement was in place. Of course, the question is also raised as to why the agreement was a once only.
I found it interesting at the time and even more so now but in the fullness of time it will al be clear.
I was having a coffee with the Bundalass last night and she asked me where we are at with ESG, no so much re the upgrades but what is the likely outcome.
Of course, I stood up and shouted - ORG @ more than $2!!!!
Well, that may work for me on HC but it carries NO WEIGHT with the Bundalass. I WISH THE ESG BOARD ANSWERED TO HER!!
Anyway, I shared my thoughts with her as I see it;
CHANCE OF STO WALKING AWAY - (0-5%)
These people have been stalking for a while, chose the right time to strike, need the gas, lined up the board and MOST IMPORTANTLY, they see the information coming out of the fields on a very regular basis. Even if they walked away it is certainly no disaster but it wont hapepen in my opinion
CHANCE OF STO GETTING ESG AT CURRENT OFFER - (10-20%)
It is possible that they have played a perfect game and the stars have aligned for them, eg, a weak board of ESG, market conditions, the poor retail shareholder been decimated, etc.
CHANCE OF STO GETTING ESG AT INCREASE OF OFFER (20-30%)
Possible that reserve upgrade forces largess from STO and they kick in more in the offer.
CHANCE OF STO GETTING ESG IF 3rd party bid entered (NIL)
STO have shown they accepted 2nd place when under pressure and have traditional been too lousy to mix it with the big boys.
CHANCE OF 3rd PARTY BID AND THEY TAKE ESG (up to 50%)
The events of the last 3 weeks or so are too comical to be real. One minute the ESG CEO is brimming with confidence that he has the world at his feet, looking at multiple options and not in a hurry to choose, let the market improve. The next moment he is engaged to the ugliest bloke in the place. Yep, ESG is too hard for the mangt but they have placed the auction sign up.
The way I see it and I explained to the Bundalass - this is a no lose for us from here when we look at the possibilities.
In my view, ESG has gone from a speculative position as an investor to quite a nice position.
I have not changed my view in any way - DC is purely a custodian of our resource, it will do the speaking now and I think it will be ORG at >$2.
Nothing will surprise from here but I cant see much downside.
All my opinion but I am not the pope!!!
Best to all
Sorry about techical inacuarcy, grammar and spelling but have to type fastand no checking due to unstable internet here
ESG Price at posting:
80.5¢ Sentiment: Buy Disclosure: Held
