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ESG, EASTERN STAR GAS LIMITED
Pargon
post Posted: Aug 10 2011, 05:24 PM
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Today Eastern Star Gas announced that an expected resource update (due for August) would not be forthcoming, due to a lack of sufficient information from the acreage under review and delays in receiving drilling approvals (from the state government) on the applicable licences.



What do they do? Well obviously demobilise the rigs that can gather the information.



Superficially this seems prudent (conservation of finance and all that) but another scenario (for the less trusting shareholder) is that they are arranging operational matters to increase the chance of the Santos bid, over ESG, being successful.



The same announcement notes that the next review of reserves will be via the ‘Independent Expert Report’ due for release in the ‘Scheme of Arrangement’ literature available next month. Am I meant to assume that the ‘expert’ is any more able to access the value of resources, when the ‘certifier’ (mentioned in today’s announcement) is unable to establish their volume? No that is one thing the expert will be unable to do.



In a bid that by my reckoning is already 20% undervalue, the effective removal of an asset (the due reserve upgrade on licences) from expert and shareholder consideration (when the time comes to vote on the scheme of arrangement) is a very low act.



The directors have banged on and on about the expected update as a continuing reason to hold or buy shares in the Company, but soon after the board starts to urge shareholders to accept the Santos bid, that reason goes away.



Convenient one might say


Said 'Thanks' for this post: crooky  
 
veeone
post Posted: Jul 26 2011, 12:36 PM
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Bank of America ceasing to be a substantial holder notice today.........Notice all the borrowed shares they had and have now handed back!!!!!! V1

 
veeone
post Posted: Jul 19 2011, 02:38 PM
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Santos puts its foot on the gas Stephen Bartholomeusz

Published 12:12 PM, 18 Jul 2011 Last update 10:05 AM, 19 Jul 2011

Santos put its foot on Eastern Star Gas and its strategic position in coal seam gas in NSW's Gunnedah Basin two years ago. Now that the scramble for unconventional gas around the world is really heating up, and with a carbon price on the horizon, its $924 million bid for the rest of the company makes a lot of strategic sense.
The agreed all-scrip bid, and the planned subsequent sale of a 20 per cent interest in Eastern Star's Gunnedah Basin permits to TRUenergy, has been made as ESG was approaching a decisive and potentially transformational moment in its own history that could have complicated any future Santos move on the company had it dallied.
Eastern Star controls a very large resource in the Gunnedah Basin, large enough to be developing plans for a multi-billion dollar export LNG project at Newcastle. While the project is still in the pre-feasibility phase, with a market capitalisation of just over $600 million, ESG was facing massive capital raisings and almost certainly a complete restructuring of its register if it were to press ahead with the plant.
Being acquired by Santos resolves those funding issues. Should a Santos-owned ESG decide to green light the project, it has the resources and credibility to raise the funding.
Santos could have moved on ESG at any point over the past two years. It has, of course, been otherwise occupied as it has focused on locking up the equity and sales arrangements for its own $18 billion export LNG plant at Gladstone.
With those agreements in place the timing for a move is right. It will lock up control of ESG before its target's own development and its funding complicates a move but at a moment when the optionality embedded in ESG's resource has become far more valuable.
There is a scramble going on to prove up sufficient coal seam gas resources to supply the three competing export LNG projects at Gladstone in order to underwrite the multi-train developments that optimise their economics. The Gunnedah Basin gas could go north.
Equally, however, the Newcastle export strategy could be pursued, giving Santos two major coal seam gas-fed LNG plants. ESG, which has Hitachi and Toyo Engineering investigating the feasibility of a mid-sized plan, has talked about exporting a million tonnes of LNG to Japan initially, rising to four million tonnes a year over time.
The introduction of TRUenergy as a joint venture partner, however, also points to another option for Santos.
Last year TRUenergy paid $2 billion to buy the Energy Australia electricity retailer from the former NSW government, along with GenTrader contracts for power. Getting access to 20 per cent of the ESG resource, at a cost of $284 million, secures access to gas for an eventual dual energy offering and, with a carbon price in the offering, provides some insurance against the gradual displacement of coal as the dominant source of NSW power.
So, Santos would have two export options for the gas as well as the domestic market. The combination of access to the international market for LNG and the international price and the carbon tax and subsequent trading scheme means there should be a rising floor under the price as producers arbitrage the difference between the international and domestic gas prices and the carbon price starts to filter through and the generation base starts to evolve towards cleaner energy sources.
The domestic unconventional gas sector, because of its export orientation, is in a somewhat different and more developed phase to that in the US, where BHP Billiton agreed to pay more than $US15 billion last week for shale gas producer Petrohawk Energy.
In the US, the shale gas sector is focused on a domestic market which is at this point a net importer of energy. And BHP's interest in shale is in its potential to cover that shortfall, as well as the ease with which it can be distributed through the US's highly developed gas pipeline networks.
With the first US export LNG terminal (the Sabine Pass terminal in Louisiana, originally built as an import terminal) gaining approval to export gas earlier this year, however, the currently quite low value of shale gas could rise over time as more of the gas gets exposed to international LNG prices, and as the US, with the rest of the developed world, becomes increasingly focused on the less carbon-intensive sources of power. Businessspectator.com.au





 
balance
post Posted: Jul 18 2011, 03:14 PM
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In Reply To: arty's post @ Jul 4 2011, 02:14 PM

STO looked after your volumes Arty. Bugger, not holding atm. sad.gif



--------------------
Day Trader: Lowest form of life in the known universe.
Shorter: Can limbo under a day trader.
Investor: Salt of the Earth.Sits to the right of God (Warren Buffet)
Share prices are only ever manipulated down.
Paper losses are not really losses.
Chat site posters always know better & know more than anyone about anything.
I'm 29.
The cheque is in the mail.
 
arty
post Posted: Jul 4 2011, 02:14 PM
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In Reply To: veeone's post @ Jul 4 2011, 01:54 PM

Looks like premature bejubilation to me.
Not saying it can't move higher, but the first attempt seems to have fizzed out as a "false break".
I'd reconsider if 60 or 62c proved holding support. Needs a little more volume too.

Attached Image





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I trade daily, but I am not a licensed adviser. Whether you find my ideas reasonable or not: The only person responsible for your actions is YOU.
I follow two rules: (1) There are no sacred truths. All assumptions must be critically examined. Arguments from authority are worthless. (2) Whatever is inconsistent with observed facts must be discarded or revised. We must understand the Market as it is and not confuse how it is with how we wish it to be. (inspired by Carl Sagan)
 
veeone
post Posted: Jul 4 2011, 01:54 PM
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After months of a sliding share price, Eastern Star Gas's shares have jumped this week, up a hefty 13.3% since Monday after Friday's solid gain. With a depressed share price, perhaps there's something in the air in respect to a possible takeover by Santos.
According to the ESG website, ESG "was formed in August 2000 to explore, develop and produce both conventional natural gas and coal seam gas in eastern Australia". When it listed in February 2001, ESG had interests in six exploration licences in Victoria and NSW and was focused on brown-coal gas plays in Victoria’s eastern Otway Basins. The company went on to shift its focus to exploration and development in NSW, acquiring numerous exploration licenses.
In July 2009, Santos (STO) acquired Gastar Exploration’s 35% interest in its Narrabri CSG project and the Wilga Park Power Station, as well as buying Hillgrove’s 19.99% interest in ESG. Total upfront consideration for the transaction was $476 million, but it's the 20% interest in ESG that makes STO a potential buyer.
Paterson's have a buy on the stock with a 1.02 valuation, noting that it is a potential takeover target for Santos.
Roger Leaning, Head of Research with RBS Morgans also has a buy on ESG. "Ideally placed to feed gas into NSW and LNG export markets, Eastern announced plans to evaluate the feasibility of LNG exports from the Port of Newcastle," says Leaning. Leaning sees Eastern’s uncontracted gas resource as a logical bolt-on acquisition for numerous companies looking for more gas, the most obvious being major shareholder, Santos. The stock is trading on a 50 per cent discount to Leaning’s $1.24 price target.
Many other analysts are also very bullish on ESG's prospects. Based on Thomson Reuters data, 89% of analysts have a buy on MBN, 11% have a hold, 0% have a sell.
http://www.thebull.com.au/articles/a/20937...-&-lyc.html




 

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OZGAZ
post Posted: Mar 1 2011, 09:17 PM
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For what they have and what's in the pipeline these guys have been hammered of late - oversold now I feel.........

Cheers

Ozgaz



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OZGAZ
post Posted: Feb 8 2011, 11:05 AM
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In Reply To: Knife's post @ Jan 14 2011, 02:58 PM

The SP appears to be bogged in the mud leftover from the floods, struggling to break 81.5 c despite a positive announcement yesterday about moving forward......

Cheers

Ozgaz



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Smile while TRADING it's only money... :)
 
Knife
post Posted: Jan 14 2011, 02:58 PM
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Like the chart on this one, some buying into resistance at 86c beginning as we move into the close.

 
veeone
post Posted: Sep 9 2010, 11:31 AM
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This a classic flag break on volume we are looking at today?? What do the experts think? V1

 
 


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