There was yet another CSG article this time in the Weekend...

There was yet another CSG article this time in the Weekend Financial Review. Same stuff as last week except the article explained that the reason for the hype now is the plans to convert the CSG to LNG and shipping it to ASIA where demand is expected to double in 10 years.

The article also said it seems bizarre that these companies have spent billions in acquisitions for a technology that is not shown to work i.e. nobody has converted CSG to LNG yet. The article then quoted an industry expert who said there is no question the conversion technology is there as these people (BG, Petronas & SHELL0 aren’t fools.

What was interesting was the valuations the different acquisitions were priced at. Petronas paid 3.88 GJ whereas BG’s bid was at around 2.60 GJ. Nonetheless, at 2.60, ESG’s current 2P reserves of 200 gives it a cap of 520Mill which is about where it is today.

If the 3P of 1,200 becomes 2P however, then ESG’s cap should be somewhere between 3.1 – 4.5 Billion i.e. 5-8 times higher than now.