ESG - Eastern Star Gas

[woltage]

A very positive announcement today on the performance of the multi-lateral production pilot
.http://www.asx.com.au/asxpdf/20090618/pdf/31j3zfthcp2vjx.pdf
The announcement spoke about the implications of this pilot leading to full field commercialisation and that the nature of the coals and verification of drilling technologies will allow for wider spaced wells with longer lateral sections for greater economy in development. We hold.

Are people happy with these flow rates, 250mcf/day?

From memory, MEL claimed they needed > 300mcf/day to be commercial, i'm assuming ESG is similar. And they're laterals, I would at least expect to see rates around what PES was (alas PES is no longer) getting, again from memory, around 700mcf/day

Not down ramping, just confused. Be interesting to see what happens after de-watering

 

[CapnBirdseye]

Are people happy with these flow rates, 250mcf/day?

From memory, MEL claimed they needed > 300mcf/day to be commercial, i'm assuming ESG is similar. And they're laterals, I would at least expect to see rates around what PES was (alas PES is no longer) getting, again from memory, around 700mcf/day

Not down ramping, just confused. Be interesting to see what happens after de-watering

I did a bit of research after the recent MEL announcment regarding the likely increases in flow with dewatering, time and stimulation, but came up with nothing definitive?

I've seen some pretty good resources from you in the past - any gems on this one?

 

[woltage]

I did a bit of research after the recent MEL announcment regarding the likely increases in flow with dewatering, time and stimulation, but came up with nothing definitive?

I've seen some pretty good resources from you in the past - any gems on this one?

Sorry Captain, all I know about ESG is what ESG tells us

But, CSM through its potential as LNG does interest me.

Just read an intersting article about a proposed pipeline being built between Iran and Pakistan and possibly on to India. This is causing a bit of political friction between the US and Russia, Iran and Pakistan. Russia like it cause more gas for Pakistan means less for Europe, thus enabling them to further control prices. The US don't like it cause it creates a political bond between Iran and Pakistan, and probably cause Russia benefits.

Anyhoo, my thoughts then turned to the role Australia (a reliable and abundant source of coal (USG), CSM) could play in exporting LNG to the world! No need for 3000km long pipelines from countries run by crazy people

My thoughts then turned to how we could control said world through our resources and become the next superpower

 

[grace]

Are people happy with these flow rates, 250mcf/day?

From memory, MEL claimed they needed > 300mcf/day to be commercial, i'm assuming ESG is similar. And they're laterals, I would at least expect to see rates around what PES was (alas PES is no longer) getting, again from memory, around 700mcf/day

Not down ramping, just confused. Be interesting to see what happens after de-watering

Yes, I'm happy with 250mcfd. Both the Bohena and Bibblewindi pilots started at about that rate. They increased from there with dewatering and are now reserves. I think getting to 300mcfd should be quite easy from here (but please always dyor).

Yes, PES were outstanding flow rates from the beginning (but again, up there with the best in the world, possibly the best along with QGC who had one at 1500mcfd, although they did have some around that 300mcfd mark). As long as flows are commercial is my biggest concern and it certainly is a fantastic start and looking the goods.

 

[pointr]

Again not from a geologist or a petroleum engineer. As ESG inferred in previous announcements and confirmed in their latest announcment there is direct communication through the natural fractures within the seams of this first multi-lateral pilot. This knowledge, that has only been confirmed by drilling a pilot will form the basis of future wider spacing of drill holes and greater efficiency. The current pilot in the dewatering stage is also drawing water from a wider area than in less porous coals, this would tend to make the process slower. The upside is that as the pressure lowers across this wider area, gas desorbtion will occur from a greater surface area of coal that should lead to higher production. The 250,000 SCFD I think was just a 'nice round figure' and a reasonable time to report to the market, I don't think it refers in any way to the final well performance. ESG may have internal projections on performance but I can't recall ever seeing any released. I'm fairly positive on ESG and agree with a previous post that doing energy business in Australia even with boring old CSG in mind must make better business sense than sovereign risk in the 3rd world

 

[lioness]

Will this ever breakout to new highs. A very frustrating stock and has been going sideways for 6 months. Any chartist care to comment, I know the fundamentals are good.

 

[kingcarmleo]

WOWEEEEEEEEEEE, pop the champagne ESG holders!

"The consideration being paid to Gastar equates to $0.66 per GJ of current 3P reserves. Santos will pay a further $20 million to Gastar if ESG meets certain reserve targets by 31 December 2009.
Santos’ acquisition of a 19.99% interest in ESG represents a strategic investment that will align the interests of the respective joint venture partners. Santos will pay $176 million1 for the interest, equating to a price of $1.00 per ESG share. Santos has agreed to make an additional payment to Hillgrove in the event that any party completes the acquisition of a beneficial interest of more than 50% in ESG at a price in excess of $1.00 per share within 18 months.

The consideration being paid to Gastar equates to $0.66 per GJ of current 3P reserves. Santos will pay a further $20 million to Gastar if ESG meets certain reserve targets by 31 December 2009.
Santos’ acquisition of a 19.99% interest in ESG represents a strategic investment that will align the interests of the respective joint venture partners. Santos will pay $176 million1 for the interest, equating to a price of $1.00 per ESG share. Santos has agreed to make an additional payment to Hillgrove in the event that any party completes the acquisition of a beneficial interest of more than 50% in ESG at a price in excess of $1.00 per share within 18 months."

 

[YOUNG_TRADER]

Amaziong amazing news,

Values ESG at $1 minimum as it shows this is what Santos are prepared to pay to HGO, wonder how much for full control ie takeover????

CSG sector has been too quiet for too long, this is just the kick along it needed


Whose next?

 

[grace]

Will this ever breakout to new highs. A very frustrating stock and has been going sideways for 6 months. Any chartist care to comment, I know the fundamentals are good.

Your day in the sun will be tomorrow by the sounds of it......I'm going to take a fundamental guess there.......and hope it keeps moving for the stock comp this month!

 

[lioness]

Wow, what a stroke of luck picking this only 2 days ago in the tipping comp, hey Grace.

I also put heaps on this at 80 cents recently. I think we will have a bidding war soon for the prize. STO will not get it that cheaply.

Question is what is this really worth?? I would think a lot more than one dollar once reserves are proven up over the next 3 months.

Who needs ozlotto when you own ESG

 

[pointr]

For the long term viewers more good news with STO involvement as well as further progress in its drilling campaign reported yesterday. For the short term viewers a pity this announcement will be priced by the market on a day when US + Europe + Energy have fallen heavily overnight. Eastern Australia's little blackout yesterday reinforces the need for more power development and CSG is an ideal fuel. The Gunnedah basin is in an ideal place to provide it.

 

[antzlovinit]

http://www.asx.com.au/asxpdf/20090702/pdf/31jd8jyck0fvyj.pdf

looks like Hillgrove resources are officially selling its investment to Santos. Hmm wonder if santos will ever want to take over...

 

[Dukey]

Damn damn damn !! Nice news for ESG holders - not great for me (only on technicalities of timing) - I got stopped out of ESG a few weeks back and thought I'd wait till new fin year to buy back in..... and I was too slow!!!

now I'll have to pay whatever the going rate is on Monday!!!!

should still be plenty of life beyond that though !

,..... there's life in ye ole CSG sector yet me maties...irate:

 

[grace]

Damn damn damn !! Nice news for ESG holders - not great for me (only on technicalities of timing) - I got stopped out of ESG a few weeks back and thought I'd wait till new fin year to buy back in..... and I was too slow!!!

now I'll have to pay whatever the going rate is on Monday!!!!

should still be plenty of life beyond that though !

,..... there's life in ye ole CSG sector yet me maties...irate:

Yes Dukey, I bought some more today (trying to push the price up for the stock comp....if only). I don't really think it matters when you buy into these type of company's, it seems to all come good in the end even if the market tanks a few times on the way.

 

[Miner]

Yes Dukey, I bought some more today (trying to push the price up for the stock comp....if only). I don't really think it matters when you buy into these type of company's, it seems to all come good in the end even if the market tanks a few times on the way.

Hi Grace

What is your secret to be in the top :

• LNC
• KAR
• and now ESG

Definitely you have some grey matters on the left side of the brain that are very uncommon . Well done and congratulations for your pick

I just bought today ESG and it was a hot cake few months back as well

Miner

 

[grace]

Hi Grace

What is your secret to be in the top :

• LNC
• KAR
• and now ESG

Definitely you have some grey matters on the left side of the brain that are very uncommon . Well done and congratulations for your pick

I just bought today ESG and it was a hot cake few months back as well

Miner

Just all luck there Miner. Grey matter not as good as a lot of investors on here who I continually learn from.
I don't think esg will make it this month........if you pick it the month that Santos really make a decent move, then you might be on the money.

 

[philly]

Hi Grace,
do you think that Santos will take another tilt at ESG? TAKEOVER???
I've read a few news articles about Santos and it seems it would ge happy to pipe gas from NSW to its proposed gas plant at Gladstone QLD. If that's the case and its economical then why wouldn't it take all the gas it can get hold of. If there is a bidding war then holders are in the box seat. Here's hopingr

 

[skc]

Hi Grace,
do you think that Santos will take another tilt at ESG? TAKEOVER???
I've read a few news articles about Santos and it seems it would ge happy to pipe gas from NSW to its proposed gas plant at Gladstone QLD. If that's the case and its economical then why wouldn't it take all the gas it can get hold of. If there is a bidding war then holders are in the box seat. Here's hopingr

I was actually thinking the chance of ESG being taken over has diminished as a result of the Santos deal. STO has now probably a blocking stake, making it difficult for anyone else to make a tile. But as we saw in the PES story, anything can happen.

On the other hand, STO itself slightly over-paid for ESG stake (as suggested by the ESG share price vs STO implied price) in a similar vein as paying some premium for taking out an option on ESG. Potentially this means they are in no hurry to takeover them in full.

 

[beerwm]

Doesn't the conditions of the deal state-

if ESG is subject to a 50%+ takeover [ within 18 months ]
the holding of HGO now owned by STO will be paid at the premium price.

I dont think STO is thinking T/O with this deal, just a stake in the permits,

35% + (0.2 * 65% ) = 48% ownership in permits.

 

[Jimminy]

STO has now probably a blocking stake, making it difficult for anyone else to make a tile. But as we saw in the PES story, anything can happen.

Yes PES is the best story to apply here.

STO does not have a blocking stake by any means. They don't have control.

For someone to come in however would mean that third party is to make a play for ESG.

STO can then decide to fold like Arrow to did to BG or pursue ESG vigorously.

STO are now in a win win if someone else bids for ESG. Whatever price someone ultimately pay for ESG, STO will have paid considerably less for their initial 48% layout.