QGC - Queenland Gas Company

[TheAbyss]

Another positive announcement today for QGC. AGL has opened the door for QGC to sell into the entire eastern seaboard. You can see why AGL dispensed with the pipeling to PNG as Qld is a lot closer and a more stable environment to opertate out of.

ASX release below .

QGC Welcomes New Interstate Gas Pipeline Link

Queensland Gas Company (QGC) welcomes today's announcement by Epic and AGL
that a new gas pipeline through Moomba will be constructed, linking the pipeline systems
of Queensland and the southern states.

"With a marketing agreement already in place between QGC and AGL, it will open up
opportunities for QGC to sell coal seam gas (CSG) into the higher priced southern
markets", QGC Managing Director Richard Cottee said today.

"This link between the two systems will mark the commencement of a truly national gas
market; and in the case of QGC, this will provide enhanced opportunities to further
develop the Undulla Nose near Chinchilla", Mr Cottee said.

"Further infrastructure enhancement is bound to follow as the merits of clean and efficient
natural gas becomes more widely recognised - and this will be a natural consequence of
the realisation that action must be taken to contain greenhouse gas emissions," Mr Cottee
said.

"QGC is ideally positioned to take full advantage of these exciting developments through
the development of its untapped gas reserves and through its marketing agreement with
AGL. There is no doubt that Queensland coal seam gas will make up the bulk of the
shortfall on the Australian eastern seaboard likely through 2010 to 2012 through the
abandonment of PNG gas pipeline proposal; and I am confident that QGC will be in the
forefront of the beneficiaries", Mr Cottee said.

 

[Sean K]

Thanks for the analysis Kennas. Interesting that despite the comparitive trend line with AOE you are of the opinion they are on their own paths. Goes to show how little i know as i thought they were almost exact replicas.

Hmmm, reviewing this they are more similar than I first thought. Must have had a few sherberts under the belt. QCGs rise has been obviously sharper however, and would be subject to a sharper correction perhaps. Might have already had that now, looks to have bounced well, and more convincingly than AOE which still looks vulnerable IMO.

 

[Dutchy3]

Hmm ... reasonable pattern and now a sharp move through it ... ought to be a reasonable trade ...

 

[Dukey]

Well Dutchy you'd be happy enough if you'd bought in I imagine!!
Its a quiet thread - but QGC charging recently to $3.09 today - pushing towards all time highs - in response to news regarding AGL's agrreement to purchase 66% of output from the 130MW condamine power plant (CSM GAS) currently under construction by QGC.
Volume nothing spectacular - but maybe that just means few sellers!?

Many Coal seamers are looking the goods again actually
- AOE pushing towards $3.
- PES - sp rising with recent drill success and new tenements.
- ESG - maybe starting a run with regarding spinoff company.

All in all a very nice day for energy stocks

 

[Dutchy3]

Hi Duke

3.2 - 3.3 looking for a breech of this price and the stock might register into blue sky ... Volumes OK but would expect it to average higher if the weekly resistance can be taken out

 

[malachii]

Well - finally broke above the $3.30 mark (closed $3.35) with OK volumes. Now it's in blue sky territory it'll be interesting to see where this ends its run.

malachii

 

[Dukey]

Well - finally broke above the $3.30 mark (closed $3.35) with OK volumes. Now it's in blue sky territory it'll be interesting to see where this ends its run.

malachii

Yep - she's really opening up a gap over AOE now - they've been tracking closely for so long now....

Interesting goings on pre-trade today...
there were 3 orders in - total of about 12k shares - at $3.69!! More than 20c above yesterdays close....now these orders were removed sometime just before first QGC trade for the day. QGC opened at $3.50...

Now I've seen this kind of thing regularly with a number of stocks and recently with QGC.... ie High bids placed in pre-trade - then withdrawn before trading starts.

Would anyone care to comment... is this attempted manipulation?? Or just idiots at work??

Anyway ... it's no reflection on the quality of the share - stunning steady performance over years... gotta love QGC. Still my best share

 

[chops_a_must]

Yep - she's really opening up a gap over AOE now - they've been tracking closely for so long now....

Interesting goings on pre-trade today...
there were 3 orders in - total of about 12k shares - at $3.69!! More than 20c above yesterdays close....now these orders were removed sometime just before first QGC trade for the day. QGC opened at $3.50...

Now I've seen this kind of thing regularly with a number of stocks and recently with QGC.... ie High bids placed in pre-trade - then withdrawn before trading starts.

Would anyone care to comment... is this attempted manipulation?? Or just idiots at work??

Anyway ... it's no reflection on the quality of the share - stunning steady performance over years... gotta love QGC. Still my best share

Had another stab at this at the start of the week, about 3.15. Just inundated with these trades at the moment. I have the breakout target somewhere between 3.70 and $4.

AS you know Dukey, I treat these CSM shares as if they were my children (if I had any, Lol!) For whatever reason, the market seems to like QGC slightly moreso than AOE, but I am a big fan of both. Will be interesting to see if the other players follow QGC. MEL has been going nuts also.

 

[Tysonboss1]

QGC - Queensland Gas Company

Hi All,

I have researching the QGC - Queensland Gas Company for a little while now.

Seems to me this company has some fantastic assets and a good platform for growth in an industry that I think will have alot of growth in the coming years.

Has anyone else got any thoughts on this company.

Basically it is a producer with massive reserves of Coal seam methane gas.

Coal seam methane is used in much the same way the our dwindling supply of natural gas is used, they are feeding the gas into the grid and are also building a 140MW power plant in partnership with the ANZ bank which they will feed with there own gas.

with some big issues coming into the future suchas Peaking oil supply and global warming I think that gas producers should do well.

 

[Smurf1976]

Re: QGC - Queensland Gas Company

Hi All,

I have researching the QGC - Queensland Gas Company for a little while now.

Seems to me this company has some fantastic assets and a good platform for growth in an industry that I think will have alot of growth in the coming years.

Has anyone else got any thoughts on this company.

Basically it is a producer with massive reserves of Coal seam methane gas.

Coal seam methane is used in much the same way the our dwindling supply of natural gas is used, they are feeding the gas into the grid and are also building a 140MW power plant in partnership with the ANZ bank which they will feed with there own gas.

with some big issues coming into the future suchas Peaking oil supply and global warming I think that gas producers should do well.

Another one to add to the list is what appears to be the imminent formation of a global gas cartel. It's likely to be similar to OPEC but with a greater share of both gas reserves and production than OPEC has with oil.

The purpose, of course, is to represent the interests of gas producers. That is, higher prices.

Australian gas is already seriously undervalued. It's cheaper than the export coal price which is ridiculous. Premium resources don't sell at a discount to lower grade resources for long. Add in the gas cartel and there's a lot of upside potential in Aussie gas prices.

 

[laurie]

One of the very few shares that held it's head high during the market melt down QGC use to play second fiddle to AOE for a while but it's strength has shone through it keept the sharks away for me re:margin load

cheers laurie

 

[Tysonboss1]

Are either AOE or QGC paying dividends yet,

AOE seems to be a bargin at the moment, and I like the facvt that it has international exposure.

 

[laurie]

TRADING HALT sorry unable to copy announcement on the ASX site

cheers laurie

 

[grace]

TH - Board considering transactions...........could be looking at another company? Just a thought......

 

[laurie]

Eastern Star Gas could fit in with their plans to tap further resources and is priced right, unless they have bigger targets in their sights hey they may try SGL again

cheers laurie

 

[grace]

UK's BG Group has taken a 20% stake in QGC ($596 million). Trying to post a link but it didn't work.

 

[grace]

UK's BG Group has taken a 20% stake in QGC ($596 million). Trying to post a link but it didn't work.

http://www.bg-group.com/media/archive_2008/020108-sx.htm

One of the many stories on it!....................................Should be good for QGC holders IMO.

 

[TheAbyss]

Are either AOE or QGC paying dividends yet,

AOE seems to be a bargin at the moment, and I like the facvt that it has international exposure.

FYI - I emailed QGC last week asking when we can expect to start receiving dividends. Response below. Would prefer to receive dividends earlier than 2 years however still a very happy older.

IMO - AOE are now not in the same race with QGC. Suitors are knocking on QGC's door regularly. The top 20 have a higher percentage of ownership and are increasing their stake at every opportunity. My gut tells me that there will be another buy back in the mid term.

One of the positives from the BG release was that there looks like there could be an alliance to get into India with QGC "The agreement marks BG Group’s first investment in Australia. QGC and BG Group have also agreed to cooperate in the evaluation of further coal seam gas opportunities in India, where BG Group already has established upstream and downstream business interests."

Email from QGC re dividends follows with removal of names etc.

Thank you for your positive and encouraging email below.
No decision has been made by the Board at this point on when QGC will start paying a dividend.

As background currently QGC has significant tax losses which are expected to be used up within the next 2 years. When these losses are exhausted and QGC starts paying income tax it will be able to attach franking credits to any dividends paid. The QGC Board will be updating shareholders once a decision is made as to timing and payment of dividends.
Please let me know if you have any other questions.

 

[TheAbyss]

Get ready for a re rating. Looking through the information at hand QGC will have to be re rated on the strength of the latest announcement with BG Group.

Once QGC are selling off shore they can earn twice the revenue for their product based on current LNG prices,

Currently they have 1,327 PJ of 2p and another 3,116 PJ of 3p (as per certified reserve upgrade in December 2007).

They should at least be re rated on the percentage they will be selling via BG. That is a hefty number.

BG gas sales project's first year of operation, Queensland Gas's earnings EBITDA could exceed A$800 million.

QGC's share of revenue from the project (over a 20 yr timeline) should be about $25 billion. What is the current market cap of QGC? $2.2b at a share price of $3.30 (as per 2007 annual report). Now that is a low PE and why it will be re rated.

Add to these numbers everything else QGC are doing such as AGL. Incitec Pivot, the QGC power station, Pipleline into the national electricity grid just to name a few and you will see where i am coming from.

The deal

Value approx A$870 million, made up via

A$250 million to buy in at $3.07 per share (new shares)
A$415 million for the interest in Queensland Gas's coal seam gas acreage
A$207 million for a further 10 percent share of the acreage once the LNG project is approved or once Queensland Gas firms up 7,000 petajoules (6.6 trillion cubic feet) of reserves.

Key to this is proving up the resources however there appears to be little doubt they are there.

Re rating imminent

 

[Dukey]

Get ready for a re rating. Looking through the information at hand QGC will have to be re rated on the strength of the latest announcement with BG Group.

Once QGC are selling off shore they can earn twice the revenue for their product based on current LNG prices,

Currently they have 1,327 PJ of 2p and another 3,116 PJ of 3p (as per certified reserve upgrade in December 2007).

They should at least be re rated on the percentage they will be selling via BG. That is a hefty number.

BG gas sales project's first year of operation, Queensland Gas's earnings EBITDA could exceed A$800 million.

QGC's share of revenue from the project (over a 20 yr timeline) should be about $25 billion. What is the current market cap of QGC? $2.2b at a share price of $3.30 (as per 2007 annual report). Now that is a low PE and why it will be re rated.

Add to these numbers everything else QGC are doing such as AGL. Incitec Pivot, the QGC power station, Pipleline into the national electricity grid just to name a few and you will see where i am coming from.

The deal

Value approx A$870 million, made up via

A$250 million to buy in at $3.07 per share (new shares)
A$415 million for the interest in Queensland Gas's coal seam gas acreage
A$207 million for a further 10 percent share of the acreage once the LNG project is approved or once Queensland Gas firms up 7,000 petajoules (6.6 trillion cubic feet) of reserves.

Key to this is proving up the resources however there appears to be little doubt they are there.

Re rating imminent

Well - looks like you got that right Abyss!!

Up almost 20% so far today, smashing through $4.00 mark. Lets hope she can stay there. This is on relatively small volume - which I view as a good thing - ie. few folks willing to sell.

- & with AOE charging back too. - Nice day for us CSM lovers!!!