the ticking top-up

Hi All,

To be honest, I had all but given away the chance that HGO had of receiving a top-up from the ESG deal. The RSPT looked to have sealed that. The time-decay on this unusual transaction was well-and-truly biting...

However, there has been a lot of provocation over at ESG. They are doing all sorts of things that are not likely to please their 'JV partner' in Santos. And in particular, they are buying land on Kooragang island for their own LNG project. Paid a deposit (non-refundable). And have a look at the date at which this transaction is consummated...

14th January, 2011.

Yep, the day BEFORE the top-up expires.

Now unless someone has gained beneficial ownership of ESG by 14th January 2011, this transaction will go through.

Now admittedly, a $25m parcel of land is not a deal breaker for a takeover of ESG - they can always be taken over after this date, together with this piece of land that is superfluous to a third party's requirements. But it does appear as if ESG is drawing a line in the sand.

This land purchase is also reminiscent of Arrow and its announcement to buy out LNG of the Fisherman's Landing site, which was the catalyst for the Shell takeover.

And other things that will not have pleased Santos are ESG's capital raising, which seems to have got some new international players on the register. And signing (or reassigning) the B&B MOU over to National Power. Like the ERM Power MOU, this will likely become a GSA if Santos or others fail to act, probably by year's end...

So this top-up, which really looked pretty dead, still has a flicker of life in it yet.

btw, some nice results from Sumba in the last few weeks. Could be a pretty big system. Hope so.

And I await the 5 months+ DD assays from Kanmantoo, and the FID at K, with baited breath.

Yaq