QGC - Queenland Gas Company

[TheAbyss]

Just another step on the path of success for QGC, albeit a large one.

Give them some time and they will be selling access to the new LNG plant to the likes of Santos, AOE etc.

Any suggestions on who might be a buy out target for QGC? They will be looking for as much CSG as they can get their hands on now that they can sell it for double the price their competition can.

 

[grace]

Well I hold QGC, ESG and SPX. ESG are cheap at the moment in my opinion, but in NSW, so I don't know that they would be on the radar. ESG looking for domestic supply down south......down to Newcastle, supply into Sydney I think. But why would you supply domestically when you can get double elsewhere? Price rises coming for Australians I feel! They will take it out of Newcastle if prices don't rise!

 

[TheAbyss]

Grace, QGC are building an LNG plant in Qld (possibly Gladstone) and once they are off loading via BG Group into the US etc at twice the local price, they will then build additional units to allow the likes of Santos etc to do the same. That will force the local purchasers to up their prices as the plant comes on line.

Yes the price will increase so the entire CSM sector should get a re rating over time IMO.

I was looking for the nearology factor re the other players adjacent to QGC as that would appeal to QGC to buy them for access to additional resources.

 

[grace]

Grace, QGC are building an LNG plant in Qld (possibly Gladstone) and once they are off loading via BG Group into the US etc at twice the local price, they will then build additional units to allow the likes of Santos etc to do the same. That will force the local purchasers to up their prices as the plant comes on line.

Yes the price will increase so the entire CSM sector should get a re rating over time IMO.

I was looking for the nearology factor re the other players adjacent to QGC as that would appeal to QGC to buy them for access to additional resources.

Sunshine Gas SHG (although tied up with Sojitz) Their map looks to have some pretty good coverage MC = $356 mill
1P 44
2P 469
3P 1097
There are also private companies too I believe (from memory looking at a map of leases around QGC and AOE's holdings).

 

[kingbrown]

Hello Grace
I hold quite a few of these gas stocks also
ESG AOE QGC
Dont forget to mention PES ( pure energy )
Yes its a young csg explorer
But its still down dramatically from the markets beating the other week

Now one of the biggest Holders in Queensland with around 21,000 km²
I guess its going to get noticed sooner or later

Ciao

 

[laurie]

Now we all know why Santos wanted QGC! if it did managed to get QGC it would have been a bargain and they must have known more than the average investor what QGC was sitting on ah well they should have offered more to shareholders instead of pissing around with under valued offers

cheers laurie

 

[grace]

Hello Grace
I hold quite a few of these gas stocks also
ESG AOE QGC
Dont forget to mention PES ( pure energy )
Yes its a young csg explorer
But its still down dramatically from the markets beating the other week

Now one of the biggest Holders in Queensland with around 21,000 km²
I guess its going to get noticed sooner or later

Ciao

Thanks kingbrown (gosh I hate snakes, no personal attack intended!)....anyway, I hold SXP (I think I said SPX). A speccie sitting on some very prospective holdings down South. Will drill this year. MOU with LNC. I hold LNC too. I will take a look at PES thanks.

 

[TheAbyss]

Thanks kingbrown (gosh I hate snakes, no personal attack intended!)....anyway, I hold SXP (I think I said SPX). A speccie sitting on some very prospective holdings down South. Will drill this year. MOU with LNC. I hold LNC too. I will take a look at PES thanks.

Thanks to you both. PES and ESG both look interesting so need to do some more research on them now. Slight leaning to PES at the moment purely on the positioning of their tenements however need to find a way to divine what they are sitting on. as they are pretty new.

Pity we couldnt read between the lines in December when QGC released the certification on the resources. It was unaccompanied and had no real reason to be completed at the time howver i bet it was a precondition to the BG deal.

Next time a CSG company releases resource certification i am buying some.

 

[Ferret]

Now we all know why Santos wanted QGC! if it did managed to get QGC it would have been a bargain and they must have known more than the average investor what QGC was sitting on ah well they should have offered more to shareholders instead of pissing around with under valued offers

cheers laurie

Doesn't AGK have 25% of QGC? They were the ones who ended up with the bargain!

With AGK's share price still in the basement, maybe it is a cheap way to pick up some exposure to QGC.

Ferret

 

[laurie]

Deleted
cheers laurie

 

[laurie]

That's true but at least we still hold QGC shares I was not interested in holding Santos shares or the cash offer we would have made a significant loss on the sp and this is only the beginning

cheers laurie

 

[TheAbyss]

Has anyone done any math on what is a fair SP is for QGC at the moment based on the British Gas deal and current projects etc?

SP is still undergoing a re rating and it is up another 3.5% today and the buyers are still stacking up for more (170 buyers for 896,096 units 73 sellers for 635,709 units). Not that technical has much to do with the movement in the SP at the moment.

Any suggestions on a possible level?

 

[laurie]

I was hoping for a $4 level after the BG deal has been taken into account but this seems to me that there must be more news coming or someone in the know otherwise why is it still going up when the market is down then again they say a good red gets better with time Mr Cottee did say this deal was a company maker so are we seeing this happening and if so $5 is on the cards by weeks end, its $4.38 as I type this

cheers laurie

 

[Tysonboss1]

Hi All,

It's going to be really hard to value this deal because of the long time frame and mulitple stage development, combined with the organic growth of their exisiting assets,...

with current Earnings at 4cents and a P/E ratio of 90

earnings are forecast to 12cents next year and 16cents the year after bring the P/E down to about 20 at todays price,...

So I think the current price is almost value for this growth stock without the BG deal, I think for now I will still be accumulating this stock, the chance it will drop back to $4 is quite slim.

 

[TheAbyss]

Hi All,

It's going to be really hard to value this deal because of the long time frame and mulitple stage development, combined with the organic growth of their exisiting assets,..

with current Earnings at 4cents and a P/E ratio of 90

earnings are forecast to 12cents next year and 16cents the year after bring the P/E down to about 20 at todays price,...

What we do know is before the LNG deal QGC was projected to sell 30PJ in 2008 and 60 PJ in 2009. This equates to $75 million in revenue for 2008 and approximately $150 million in 2009. There are apparently 2010 projections in broker reports by JP Morgan, Wilson HTM and ABN Amro as they have done all the analysis and also projected out to 2010

We do know that the projected revenue from just the BG deal is $800 million. That is approximately a multiple of 5 for their PE without any other projects, of which there are already quite a few on record.

So how do you measure this? Other factor to consider is QGC will be receiving twice the price for its resources once the facility is operational plus they are proving up more resources as part of the conditions of the contract and you can be pretty sure they will not stop at the required 7000 PJ for BG. They will over shoot that easily IMO.

How far forward do you value these guys?

Word of caution also, Given the difficulty in placing a value on QGC there is potential for it getting way ahead of itself and pulling back on retracement once some professional evaluations hit the streeets. Won't affect long term holders of course but i wouldnt like to go to far on their LVR to buy some more or use the equity for other stocks then have to sell some. Should be ok for a while yet though. Up .5.98% today and finished on a high with 156 buyers for 815,247 units 51 sellers for 471,021 units in the queue.


We need a brokers report.

 

[grace]

A bit of commentary on the CSM industry, but note no valuations per their knowledge

http://www.fnarena.com/index2.cfm?type=dsp_newsitem&n=F23611ED-1871-E587-E1B17039BE74B602

 

[grace]

Well, there were a heap of sellers at $4.60, now they have all gone. I think some were pulled. Not many sellers there now.

 

[grace]

Interesting read in the Courier Mail today, both about QGC and also a fellow by the name of Ian Sykes, first to discover CSM in Australia so he claims. He is fighting for his exploration license that the qld govt (and QLD gas) claim to have expired back in 2000. The block "Xyloleum" sits in amongst some nice CSG of Berwyndale (QGC), Talinga (Origin) and Argyle (QGC, Origin). Claims to have 340 000 million cubic feet of gas in his claim. Qld govt could pick up a windfall gain of $250 million for the sale of the gas lease (and I think QGC would be there with bells on putting their hand up). Interesting to see how it all unfolds. Claims his lease holds $2.7billion in gas sales from the well head (if converted to syngas and GTL - see Linc Energy (LNC) first pilot about to be commissioned this month.

 

[TheAbyss]

Grace, I was concerned also so fired in an email to QGC and asked the question. Response below. Whilst it was reassuring to read that the case had been awarded to teh Qld Govt and costs awarded agains Mr Sykes, i have replied back and asked what the maximum potential downside is should things go south and will post when i receive a reply.

"This case has been going on for a number of years. Mr Sykes has been losing applications to the various courts and racking up significant costs hence he has lost his large fortune. We understand that costs have also been awarded against him.

At this point it is to early to say what the final outcome will be however QGC is keeping a watching brief on proceeding."

 

[grace]

Grace, I was concerned also so fired in an email to QGC and asked the question. Response below. Whilst it was reassuring to read that the case had been awarded to teh Qld Govt and costs awarded agains Mr Sykes, i have replied back and asked what the maximum potential downside is should things go south and will post when i receive a reply.

"This case has been going on for a number of years. Mr Sykes has been losing applications to the various courts and racking up significant costs hence he has lost his large fortune. We understand that costs have also been awarded against him.

At this point it is to early to say what the final outcome will be however QGC is keeping a watching brief on proceeding."

I did not think that there was any downside for QGC and others, as his claim is on a lease that no other company is currently on. Just that it has been cancelled by the Qld govt and thus will revert back to them, and will be put up for auction for interested parties (assuming any appeal is lost). That's the windfall gain that the Qld Govt are looking forward to. Is this your understanding of the media coverage in the courier mail on Saturday last?