w o o, page-13

Mr P,

Yes, that seems most likely.

Given that Santos didn't bid at any other time in the last 18 months - even after they secured the offtake partners, debt raising, equity divestments, FID and non-core asset sales - then they are unlikely to bid before the reserves upgrade.

So, yes, I suspect the booking of the next reserves upgrade is the catalyst. After all, no one spends up to $16 billion on a 2-Train project for an 11% IRR. The big money is for trains subsequent to the initial two trains. And no one spends $500,000,000 without wanting a return. An investment company, Santos ain't!

But, plenty of other 'preparatory' work to do before then for Santos.

- Soften the market up for the idea that using gas from Gunnedah is a good idea;
- Sell the market on the idea of Santos as a 'net seller of gas' - GLNG consortium bids for ESG, so no out of pocket expenses for Santos. GLNG as a project gets bigger.
- try to scare ESG shareholders via new media about how they can't do their own project, (so a Santos lifeline is the only option);
- tell ESG holders about their awful 'predicament'
- frustrate and beat-down ESG shareholder price expectations via third-party short-selling
- scaremonger about gas gluts, bogus legal cases, capital raisings, farmers, greenies, ESG in Santos' grasp, ESG not wanted by Santos, land access, endangered species, lean gas, stranded gas, long investment wait, water, fraccing, toxic chemicals, self-serving management, consolidation, lack of consolidation, poor technical indicators, capital costs, political uncertainties, pipelines, mouldy MOUs, lack of communication, and goodness knows what else...

Yes, a couple of months until the reserves upgrade. But plenty of work for Santos to do before then. :)

Yaq