HardmanI don't know the answer but...Today's KGB Report suggests...

Hardman

I don't know the answer but...

Today's KGB Report suggests ESG management folded because raising the money to fund its Newcastle gas export project would have significantly altered it's shareholder register. In other words management would have lost control of the project.

Hahahahaha...if that is true now then it was also true before management bought the land and started the feasibility study. Clearly management ought to have known that project was very very costly and marginal at best.

KGB's point simply doesn't hold water. There is a highly profitable alternative to export and that is supplying the NSW market with gas. As the only NG producer on the outskirts of Sydney ESG holds a major trump card to use in negotiations with the state government when it comes to stitching up a power station gas supply deal, plus it has it's own generation plant that was about to be significantly upgraded, not to mention it's MOU's with two major power companies.

ESG's best strategy would have been to drill flat out to prove up the reserves and just sit back and wait for the offers to roll in.

Interestingly, the US has just passed the Natural Gas Act that mandates the conversion of all petrol and diesel vehicles in the federal government's fleet to NG. Whether or not this is the beginning of a trend it send a strong signal to the market that gas is the next big thing.

Why sell out for peanuts? Either the reserves upgrade is so meagre it adds no value to ESG, or management had no other option or it did it out of self interest.

The buring question is why NOW, on the verge of a reserves upgrade management has said will be huge (see earlier ESG announcements).

Let us pray for another bidder soon...perhaps with the turnover of the past few days we will see another gorilla on the register...let's hope so.