MEL - Metgasco Limited

[sinner]

This is a fun game.

Started with KAR, it bounced up.

Took profits, re-allocated into KAR and profits into ESG, it bounced up.

Took profits, re-allocated into ESG and profits into MEL today 0.45.

All I wanted was KAR as a long termer and got these two for free

To the bottom drawer I say!

 

[JTLP]

Sinner...can I ask why you picked up MEL now?

Is it due to there massive reserves and the fact that you think they will be a T/O target with the recent activity in the sector?

I've missed MEL twice now (predicted both bounces off the low grrr!) and wouldn't mind seeing it drift back down so JTLP can get some

Can't see it happening with recent activity though...

 

[Dukey]

A couple of links of significance to MEL , ESG, and other NSW coal seamers - also could be great for AJL if they can be involved in the pipeline contract.

1. Hunter to Qld pipeline is GO!!!!!!! this should help kick NSW along in the csg game.

http://www.theherald.com.au/news/local/news/general/600-jobs-in-850m-hunter-gas-project/1439881.aspx

2. Focus on NSW csg.
http://www.businessday.com.au/business/focus-turns-to-nsw-coal-seam-gas-20090102-7943.html

 

[sinner]

Sinner...can I ask why you picked up MEL now?

Is it due to there massive reserves and the fact that you think they will be a T/O target with the recent activity in the sector?

I've missed MEL twice now (predicted both bounces off the low grrr!) and wouldn't mind seeing it drift back down so JTLP can get some

Can't see it happening with recent activity though...

Hi JTLP,

I am not your usual player.

Have been sitting on the sidelines for a couple of years now waiting for the crunch. This has given me plenty of time to formulate an entry strategy.

Stage 1 was of course gold and gold stocks as soon as they presented value on a fundamental basis.

Next was energy sector, and I simply had a long hitlist of companies I wanted to expose my money to (again, on a fundamental basis). At this point in my plan I was to be exposed only in a minor way to gas and much heavier on oil.

However, fundamentals shifted heavily so I knocked a lot of oil speculation (happier to divide the oil capital amongst stronger plays) out of the hit list and now just working my way through what is left (LNG, CSG, etc).

Since these are long term plays I am looking to accumulate rapidly in what I see as temporarily impaired markets. Not too concerned with day to day fluctuations in the price, only what I see as value. If one play decides to yield me capital gains during this accumulation I will just return it into the market (in this case MEL, next on the list) before the bottom drawer.

I have been saying for ages that we are idiots as a country for importing expensive oil and selling our valuable gas to China on the cheap (REDICULOUSLY CHEAP), especially when there could be a significant market overlap on domestic and industrial uses with a bit of government support.

So when I see the market ravaged, yet finally good investment into domestic gas infrastructure, I will take advantage. Plus, I am cheating a little, and hoping Russia will start some **** which will cause gas prices to rocket.

My expertise in the energy field is nil. I always ask my room-mates brother, who recently graduated a petroleum/energy engineering type degree at UNSW for advice on the simplest terminology when going over anns trying to decide on picks, so you should not take my picks as anything "savvy"!

I have noticed yesterday in the ESG thread and today in MEL that people have been mentioning the QLD->Hunter pipeline. Can people explain to me why this is bullish? If gas is flowing rapidly from QLD down to Hunter region in 3-4 years then isn't there going to be less demand for NSW gas? Admittedly we are supposed to be pretty starved of it in this state, so maybe there is plenty of demand for both.

Would appreciate some input.

 

[beerwm]

Hi JTLP,

I am not your usual player.

Have been sitting on the sidelines for a couple of years now waiting for the crunch. This has given me plenty of time to formulate an entry strategy.

Stage 1 was of course gold and gold stocks as soon as they presented value on a fundamental basis.

Next was energy sector, and I simply had a long hitlist of companies I wanted to expose my money to (again, on a fundamental basis). At this point in my plan I was to be exposed only in a minor way to gas and much heavier on oil.

However, fundamentals shifted heavily so I knocked a lot of oil speculation (happier to divide the oil capital amongst stronger plays) out of the hit list and now just working my way through what is left (LNG, CSG, etc).

Since these are long term plays I am looking to accumulate rapidly in what I see as temporarily impaired markets. Not too concerned with day to day fluctuations in the price, only what I see as value. If one play decides to yield me capital gains during this accumulation I will just return it into the market (in this case MEL, next on the list) before the bottom drawer.

I have been saying for ages that we are idiots as a country for importing expensive oil and selling our valuable gas to China on the cheap (REDICULOUSLY CHEAP), especially when there could be a significant market overlap on domestic and industrial uses with a bit of government support.

So when I see the market ravaged, yet finally good investment into domestic gas infrastructure, I will take advantage. Plus, I am cheating a little, and hoping Russia will start some **** which will cause gas prices to rocket.

My expertise in the energy field is nil. I always ask my room-mates brother, who recently graduated a petroleum/energy engineering type degree at UNSW for advice on the simplest terminology when going over anns trying to decide on picks, so you should not take my picks as anything "savvy"!

I have noticed yesterday in the ESG thread and today in MEL that people have been mentioning the QLD->Hunter pipeline. Can people explain to me why this is bullish? If gas is flowing rapidly from QLD down to Hunter region in 3-4 years then isn't there going to be less demand for NSW gas? Admittedly we are supposed to be pretty starved of it in this state, so maybe there is plenty of demand for both.

Would appreciate some input.

Might be wrong,

but i took it as the NSW csg acreage owned by agl,sto,esg,mel etc now have a export market available - due to the planned LNG plant at gladstone. but I may be wrong

 

[Dukey]

Have been looking a bit closer today at these pipelines to sort out my own lack of knowledge/confusion regarding diff proposals - it seems there are 2 main proposals:

1. The big one in the announcement below is the $850M 'Qld - hunter pipeline' - which is supposed to carry gas from Western Qld to Hunter region (Newcastle) in NSW for a gas fired power plant. This would be a 800 odd-klm pipeline!!

As such - I'm not sure how this one will impact MEL - maybe not much at all, it's too far west. But it will attracting attention to CSG in NSW

2. The other MEL proposal is called the ' lions way pipeline' - to transport gas from Casino about 150klm to SE Qld (Ipswich - Brisbane - gold coast). Much shorter than the western one. Costs could be around $200Mill (just going relative to the other pipe).

At first glance the MEL pipe makes more sense to me - it seems strange to bring gas from QLD to NSW (western pipeline), when there are already plenty of largely undeveloped reserves in sub-coastal and central NSW - ESG, AGK and MEL having most of them as far as I know. I mean the gloucester basin which AGK just bought is right there!!!.... next to where they want to build a power plant.
... I don't get it??

On the other hand - if MEL can build a short pipeline to feed into SEQ - the fastest growing residential area in Oz - with the potential of also supplying the LNG plants, or swapping gas with those companies - then they will be laughing IMO.

It's all very interesting.... the main message is that CSG is not going away and still the place to be in these dodgy markets.
Think I'm gonna use my PES $$ to buy more of all the NSW coal seamers... sooner or later they will charge just like the QLDers.... probably sooner.

-E
====================

[Pipelne map of Oz - (it's old and these two proposals are not on it)
http://www.ena.asn.au/webc/factsandfigures/?0,0,a001,236 ]

 

[seasprite]

ESG/OIP stand to gain from the proposed hunter pipeline route , runs pretty much smack bang in the middle of their permits http://www.qhgp.com.au/data/qhgp-map.pdf

I am bias on OIP being a holder and it is my competition pick for FEB.

 

[Dukey]

Small reserves increase for MEL today, including 1st 1P reserves.

1P = 2.7 Pj
2P = 298 Pj
3P =1,538 Pj

Nothing spectacular - but its just the starting point for MEL. 2P and 3P numbers give a better indication of their value IMO.

 

[JTLP]

This stock makes me cry...sitting on zi watchlist for too long...ahh well you win some you dim some!

Would any kind chartists on the ASF board be willing to explain any recent trends within MEL? If it retraces I may this time pick it up (which will probably lead to it sinking like a lead balloon)...

Also some big buying at end of day today...closed on daily high

 

[big sal]

It's all happening.

MEL up 20% today, buyers stacking up and not too many sellers left at present. Where to for this one, until today it had been ranging between 35c-50c for a while now, but nudging 60c now. Still a way to go to hit its 12 month high of $1.50.

ESG travelling nicely at about 70c and not too far from its 12 month high of 93c and OIP up from 6.5c to 14c in about 7 days!

 

[kingcarmleo]

Cap raising time, ESG just completed there cap raising -50 million at 0.55c. Hopefully shareholders get a chance to participate in this.

 

[sinner]

This stock makes me cry...sitting on zi watchlist for too long...ahh well you win some you dim some!

Would any kind chartists on the ASF board be willing to explain any recent trends within MEL? If it retraces I may this time pick it up (which will probably lead to it sinking like a lead balloon)...

Also some big buying at end of day today...closed on daily high

Hi JTLP,

We are quickly approaching 0.4 again and I see over 560,000 units being bidded at this price. i.e. strong resistance is visible in the order book without even looking at the chart.

Whether this is a buy or not by your strategy is not up to me!

 

[YOUNG_TRADER]

The CBM/CSM sector continues to fire, I read articles about BG going after VPE (which would explain the price rise) and Santos going after ESG, not sure why BOW is running so hard

Anyway MEL seems to be one of the cheapest on an EV per Reservers status (will put up a pic of the table that compares all the Aussie CSM/CBM players when I get a chance)

Just announced a placement at 40c + a rights issue at 40c so I would think perhaps 40c becomes a base

Anyway looked good for a punt

DYOR

 

[sinner]

The CBM/CSM sector continues to fire, I read articles about BG going after VPE (which would explain the price rise) and Santos going after ESG, not sure why BOW is running so hard

Anyway MEL seems to be one of the cheapest on an EV per Reservers status (will put up a pic of the table that compares all the Aussie CSM/CBM players when I get a chance)

Just announced a placement at 40c + a rights issue at 40c so I would think perhaps 40c becomes a base

Anyway looked good for a punt

DYOR

I would like to see that chart!

It went to 0.39 last dip before bouncing, but it may have just a bunch of big orders being filled in the vicinity.

Notice the doji provided at the beginning of the last bounce, we had a similar one yesterday. Will be interesting to see if today closes similarly to the candle which proceeded the last doji (i.e. up).

At the very least that gap looks fillable if we don't break down from here

 

[JTLP]

Hi JTLP,

We are quickly approaching 0.4 again and I see over 560,000 units being bidded at this price. i.e. strong resistance is visible in the order book without even looking at the chart.

Whether this is a buy or not by your strategy is not up to me!

Thanks Sinner and YT.

I also agree that 40c will be the new floor with the issue of shares etc. Bounced off it today but we shall see. If it breaks below 40 its only real stop will be at 35...below that and its back to 28 where I will be looking to buy for real this time!

My strategy would have worked to a T before sinner...but since it has now gotten away I didn't look at MEL again. Might have to revisit thanks to your words . I will wait to see what plays out (as per my supports above)...but if 40 is established I can see it as a decent risk/reward play (now that they have more working capital).

 

[STRAT]

The CBM/CSM sector continues to fire, I read articles about BG going after VPE (which would explain the price rise) and Santos going after ESG, not sure why BOW is running so hard

Anyway MEL seems to be one of the cheapest on an EV per Reservers status (will put up a pic of the table that compares all the Aussie CSM/CBM players when I get a chance)

Just announced a placement at 40c + a rights issue at 40c so I would think perhaps 40c becomes a base

Anyway looked good for a punt

DYOR

Hi Young Trader. Any chance you still have that article or a link regarding BG going after VPE?. I would very much like to read that being a VPE holder.

Thanks in advance and sorry for being somewhat off topic everyone

 

[YOUNG_TRADER]

Hey guys,

Yeah will try and find those articles and do the copy and paste,

Sorry I have just been so so slack lately, anyhoo 40c looks to be holding for now, thanks for the chart Sinner

Here is one article I did save, its pure SPECULATION THOUGH!!!



Wheels & Deals
1:14 PM, 16 Mar 2009 Madeleine Heffernan
Broken Arrow

Arrow Energy has thrown in the towel in its battle for coal seam gas explorer Pure Energy, giving British giant BG Group a nice chunk of Queensland's coal seam gas assets for a hefty $1 billion price tag.

Arrow told the market on Monday that it would not proceed with compulsory acquisition of the remaining Pure shares.

Arrow's offer – $3 cash and 1.57 shares for every Pure Energy share – closed on March 13 at 7pm, with the Queensland energy group ending up with a 20.31 per cent stake in Pure, though it already owned 19.9 per cent through a pre-initial public offering investment.

Pure Energy had initially supported the Arrow takeover, but when BG came onto the scene – just months after being spurned by Origin Energy – a real takeover battle began, culminating in BG boosting its offer to $8 a share, or $8.25 per share, should it receive 90 per cent shareholder acceptance for its offer.

The decision by Pure directors and key shareholders Karl Meade and Tom Fontaine to sell into the BG offer didn't help Arrow's case, and when Arrow's major backer Royal Dutch Shell – an 11.2 per cent shareholder in Pure – announced it would accept BG's offer for its shares, Arrow's bid was severely dented, with Arrow either unwilling or unable to boost the cash component of its bid, and aware that a boosted scrip component would push down its own share price.

BG Group, the UK's third-largest natural gas company, has more than one-third of Pure, and it's now expected that Arrow will sell into the BG offer. BG's offer closes on March 23.

Pure is being advised by Russell Keating and Nick Bagot from Goldman Sachs JBWere and Neil Pathak from Freehills. BG is being advised by Gresham's David Feetham and Michael Ashforth with legal support provided by Braddon Jolley, Jaclyn Riley-Smith and Sandy Mak from Corrs Chambers Westgarth.

Arrow is being advised by Wilson HTM's Simon Keyser and John Humphrey from Mallesons Stephen Jaques.

It's worth noting that Arrow bought its Pure stake for less than 50 cents a share on average, so while it didn't walk away with the prize, it certainly will get a wad of cash.

So what's next for Arrow, having allowed its takeover offer to lapse? There's talk it will look to take over juniors such as Red Fork Energy, Westside, European Gas, Metgasco, Victoria Petroleum, Box Energy, Molopo, or Sydney Gas. There's also talk it may too become a target as international giants seek to boost their exposure to Australia's coal seam gas assets.

In any event, Arrow's keeping busy, with its international unit agreeing to buy 75.25 per cent of Far East Energy Corp's (FEEC) stake in the Qinnan coal seam methane venture in China.

Arrow also agreed to make a convertible note investment in FEEC, which if converted will make Arrow the largest shareholder with an 11.5 per cent stake, and includes warrants to increase its shareholding over time to 15 per cent.

Houston-based FEEC is one of the biggest coal-bed methane producers in China, and operator and foreign contractor to China United Coalbed Methane, whose interest in the Qinnan block will shortly be transferred to Petrochina. The Qinnan block is in the Qinshui basin of Shanxi Province.

Arrow said Qinnan block represented "one of the best prospects for near-term commercial coal bed methane production in China," and it is confident in targeting reserve certification within two years, with commercial development beginning shortly after that.

"We expect Qinnan to become a material project within the Arrow portfolio, capable of producing 15-20 petajoules per annum for at least 15 years," Arrow told the market.

Royal Dutch Shell, a 10 per cent shareholder in Arrow International, will have the right to farm-in for up to 50 per cent of Arrow's interest in the project within five years.

 

[YOUNG_TRADER]

Another speculative article talking about ESG and MEL




Wheels & Deals
4:53 PM, 12 Mar 2009 Michael Feller
A star spangled deal


Eastern Star Gas has raised $50 million through a placement to institutional investors, partially underwritten by Patersons Securities in Perth.

The company said it could not confirm the names of the investors at this stage, but that they included some “big American names”. Eastern Star began to trade on a US over-the-counter pink sheets exchange earlier this year (see Gas explorer thinks pink, January 13). San Francisco-based investment bank Merriman Curhan Ford arranged the listing on the PrimeQX exchange, which also trades American depository receipts in Linc Energy and White Energy.

"We are delighted with the support received from new and existing investors, particularly given the current economic environment," said Eastern Star managing director David Casey. "It is a show of confidence in ESG and the potential of the Narrabri coal seam gas project."

Eastern Star holds a 65 per cent interest in Narrabri, near Tamworth in New South Wales, with Gastar Exploration holding the balance. Production testing is underway at two locations on the 9,100 square kilometre site and approximately 70 per cent of funds raised will be used for drilling of production pilots and core holes. Eastern Star says it expects to see certified reserves increase well beyond present targets.

The placement, at 55 cents a share, will settle on March 17.

The coal seam gas potential of Queensland has been a bullish investment theme of late, illustrated by the takeover battle for Pure Energy Resources (see It ain’t over yet, March 4) and last year’s acquisition of Queensland Gas Company by BG Group. Yet New South Wales is hot too, according to a recent broker report written by Patersons analyst Scott Simpson.

Simpson also noted that based on BG’s offer for Pure – and Pure’s estimated 3C contingent resources of 5797 petajoules compared with Eastern Star’s 6128PJ – a valuation of 93 cents per share for Eastern Star is implied. Based on current proven and probable (2P) reserves, Pure’s latest offer values Eastern Star at 75 cents per share, but on target 2P reserves of 845PJ, that means $2.90 a share for Eastern Star.

Eastern Star was rumoured to be in the sights of Arrow Energy, after it was outbid by BG Group for Pure Energy. While the capital raising puts such speculation to bed, the rumour mill has now set its sights on Metgasco, currently in a trading halt pending the announcement of a share placement. Metgasco holds the biggest coal seam gas reserves in New South Wales.

 

[STRAT]

Another speculative article talking about ESG and MEL




Wheels & Deals
4:53 PM, 12 Mar 2009 Michael Feller
A star spangled deal


Eastern Star Gas has raised $50 million through a placement to institutional investors, partially underwritten by Patersons Securities in Perth.

The company said it could not confirm the names of the investors at this stage, but that they included some “big American names”. Eastern Star began to trade on a US over-the-counter pink sheets exchange earlier this year (see Gas explorer thinks pink, January 13). San Francisco-based investment bank Merriman Curhan Ford arranged the listing on the PrimeQX exchange, which also trades American depository receipts in Linc Energy and White Energy.

"We are delighted with the support received from new and existing investors, particularly given the current economic environment," said Eastern Star managing director David Casey. "It is a show of confidence in ESG and the potential of the Narrabri coal seam gas project."

Eastern Star holds a 65 per cent interest in Narrabri, near Tamworth in New South Wales, with Gastar Exploration holding the balance. Production testing is underway at two locations on the 9,100 square kilometre site and approximately 70 per cent of funds raised will be used for drilling of production pilots and core holes. Eastern Star says it expects to see certified reserves increase well beyond present targets.

The placement, at 55 cents a share, will settle on March 17.

The coal seam gas potential of Queensland has been a bullish investment theme of late, illustrated by the takeover battle for Pure Energy Resources (see It ain’t over yet, March 4) and last year’s acquisition of Queensland Gas Company by BG Group. Yet New South Wales is hot too, according to a recent broker report written by Patersons analyst Scott Simpson.

Simpson also noted that based on BG’s offer for Pure – and Pure’s estimated 3C contingent resources of 5797 petajoules compared with Eastern Star’s 6128PJ – a valuation of 93 cents per share for Eastern Star is implied. Based on current proven and probable (2P) reserves, Pure’s latest offer values Eastern Star at 75 cents per share, but on target 2P reserves of 845PJ, that means $2.90 a share for Eastern Star.

Eastern Star was rumoured to be in the sights of Arrow Energy, after it was outbid by BG Group for Pure Energy. While the capital raising puts such speculation to bed, the rumour mill has now set its sights on Metgasco, currently in a trading halt pending the announcement of a share placement. Metgasco holds the biggest coal seam gas reserves in New South Wales.

Thanks for those Young Trader I appreciate it.

With your permission Id like to share them with fellow holders on Share Trader. I will wait for an OK from you though. Ive noticed one can get a real bad name for ones self doing copy and paste of your posts and material.

Both BOW and VPE have a strong following there.

 

[YOUNG_TRADER]

Hey Strat, go for it mate,

Those articles are public (not mine) they are available to all via simple web search


Was just looking at MPO and how it sold its NSW Gloucester PEL 285 for $370m to AGL (MPO only had 30% interest)

PEL 285 had 2P of 180 PJ and 3P of 360 PJ

MEL has 2P of 247 PJ and 3P of 1400 PJ

Based on recent take overs and even MPO's sale I would think MEL stands a fair chance of having an offer made given its current mkt cap is $75m with $15m cash leaving an EV of $60m for those large 2P and 3P reserves