Anatol, what if JP Morgan had said that AOE were a takeover target. Would you use that to support your argument? The second thing is is that the whole mkt was crashing around QGC at that time.
Here is what the report said:
"Would Shell consider a potential takover of Arrow Energy first/instead? It could but unlikely, in our view, based on the economics of coal seam gas acreage held by Santos, BG and Origin is superior to that held by Arrow. Figure 1 shows a chart presented by Origin at JP Morgans's 2008 CSM corporate access day. the chart shows that the best results in QLD in terms of reserves recovery per well and also in terms of the average peak flowrate per well are achieved from the Fairview and Spring Gully fileds in the Bowen Basin, and also acreage in the Undulla Nose area of the Surat Basin. Much of Arrow's acreage is outside this area, as we highlight in Figure 2. With much lower anticipated reserves per well and lower peak flowrates, the economics of CSM-LNG would be inferior from Arrow's acreage compared to Santos' Fairview field. We believe that this issue has been highlighted by Arrow's bid for Pure Energy"
I had heard this of AOE before but never seen it presented in such a convincing manner (sorry i could not attach graphs). I think i had previously stated that AOE will be taken over. I stated this on the basis of how developed their infrastructure is compared to the PES's of the industry. PES is just a few holes in the ground with well head equipment whereas the AOE and QGC have trunklines, compression facitlies, gathering systems and everything else necessary for production.
I am holding some AOE but think critical analysis of stocks, or anything for that matter, important (see my CSG-LNG posts on KAR forum). Let us just wait and see - more "AOE will get taken over posts" are unlikely to change the outcome.
I wouldn't beleive what those guys say at all. They are the ones manupulating the market. That's for sure for me. I make my own research. Do you beleive if they see an crutial point and they would tell this to market ? No..!
The above report is right in some points. But I beleive it is not the acrage issue although AOE has got the biggest acrage is true. (I can send the tenements maps to your private email address dangerous.) Origin and Santos have the best known gas acrages, that is true too.
Yes, it is about the gas flow and quality of gas, everyone knows this. The right point is, Santos and Origin have got the best acrages ; Fairview and Spring Gully. Arrow deos not have much around this area. PES does not have much too ..! But look at their SP !
More importantly, if you look at the certified reserves Arrow has the 25% of whole QLD. This is written on QLD Government statistics. (I can email these too). Santos and ORG don't have more certified 2P reserves than AOE (inc.the 30% sold to Shell, of course) And that 2600 2P reserve is certified on only 10% of their acrages. Santos and Origin is not like that. Their reserves are nearly all in same area. So very much explored.
What about that? I am wondering why dont' they tell that on their report?
Gas flow, gas quality, etc. This gas will go to Asian market, especially China. Even someone got theinferior quality gas, it will still be easily sold. This issue was an argument 2 years ago when Woodside told they were not interested in CSG because it was inferior gas. Tey said they don't need it as they had enough LNG.! They you go. Everyone has a different point.
I am started to think Shell may takeover Santos which would be too expensive for BG to buy. (market cap is about 9b now, takeover would be 15b !) BG can't afford that much money. Their shares are already going down in UK because they are considered making risky investments. But Shell may do it. But I am not sure why Shell would do it aither! I believe Shell will go out of this market. They have enough investments all around the world on LNG (I explained this before)
So there is no one interested much in this CSG market other than BG
anymore IMO,