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The preparation of the core hole site at Paynes Crossing is expected to be finished by the end of this week.
SGL - Sydney Gas
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The preparation of the core hole site at Paynes Crossing is expected to be finished by the end of this week.
So, you took up the position Jonathan? LOL
Just as well you can keep us updated with these tidbits, since the company isn't interested in such niceties.....
AJ
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The notice was part of SGL community updates. You can subscribe to them by entering your email into the following web page. 
http://www.sydneygas.com/content.php/12.html
Tri mengemukakan, Pertamina akan menggarap dua wilayah kerja di Sumatera Selatan. Perseroan akan
bermitra dengan Shell dan Sydney Gas.
http://els.bappenas.go.id/upload/kliping/pertamina dan vico.pdf
http://www.sydneygas.com/content.php/12.html
Tri mengemukakan, Pertamina akan menggarap dua wilayah kerja di Sumatera Selatan. Perseroan akan
bermitra dengan Shell dan Sydney Gas.
http://els.bappenas.go.id/upload/kliping/pertamina dan vico.pdf
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"Management of SGL have further advised that based on the current drilling activity, it is
expected that it is unlikely for the targeted additional 500 1P reserves to be proved up by 31
December 2008. Accordingly, it is unlikely that AGL will be required to pay SGL a sum of $51
million under the Asset Sale and Purchase Agreement."
Well, that comes as no surprise.
Even worse, the independent auditor has also estimated the potential benefit per share to SGL of developing up the estimated Hunter reserves (by 2011) of a mere +20c to +22c per share!! Abysmal... read this lot and weep, holders.
http://www.asx.com.au/asx/statistics/showAnnouncementPDF.do?idsID=00860297
AJ
(holding some dregs)
expected that it is unlikely for the targeted additional 500 1P reserves to be proved up by 31
December 2008. Accordingly, it is unlikely that AGL will be required to pay SGL a sum of $51
million under the Asset Sale and Purchase Agreement."
Well, that comes as no surprise.
Even worse, the independent auditor has also estimated the potential benefit per share to SGL of developing up the estimated Hunter reserves (by 2011) of a mere +20c to +22c per share!! Abysmal... read this lot and weep, holders.
http://www.asx.com.au/asx/statistics/showAnnouncementPDF.do?idsID=00860297
AJ
(holding some dregs)
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See attached July 2008 Hunter Newsletter (can't find it on the website - was e-mailed to me).
AJ
AJ
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Well AJ & J.... guess we can take comfort in fact that AJL at least(!) still has enough faith in SGL to purchase another ~7.5 million shares on-market over June & July, incl $500k worth purchased on 1/8/08 @ av~0.34. Takes them to over 18%....
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Col,
AJL have a huge knowledge advantage over the rest of us. IMO they are privy to not only the initiall drilling results encounted in the Hunter but also the results and progress of other similiar companies.
A few questions:
1) Who is selling?
2) What are AJL's intentions in the short term? With 18% of SGL already they are in position of enormous strength to defeat any takeover offer or to launch their own.
3) Why is no technical data being released to the market? This is one reason why the shareprice is depressed.
The next few months will be very interesting.
Cheers,
Bill
AJL have a huge knowledge advantage over the rest of us. IMO they are privy to not only the initiall drilling results encounted in the Hunter but also the results and progress of other similiar companies.
A few questions:
1) Who is selling?
2) What are AJL's intentions in the short term? With 18% of SGL already they are in position of enormous strength to defeat any takeover offer or to launch their own.
3) Why is no technical data being released to the market? This is one reason why the shareprice is depressed.
The next few months will be very interesting.
Cheers,
Bill
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http://singleton.yourguide.com.au/news/local/news/general/could-well-lead-way-to-175m/1239338.aspx
Exploration drilling at Glendon began last week.
Drilling down to a depth of around 900metres.
Core samples are being taken for assessment.
An estimated value of $175 million a year.
The Hunter region’s potential is expected to far exceed the production of the Camden Picton area where Sydney Gas currently has 80 production wells.
Colin Stace said drilling at the Glendon site would take around eight weeks and a further three to four months before there would be a clear picture of the potential for the site.
In the Singleton district, three core holes have been completed at Bulga, Howes Valley and Mount Thorley. One hole is nearing completion at Belford and another is being prepared at Maison Dieu.
Following successful exploration drilling in Broke two test wells are currently operational and if this proves successful a production plant would be considered.
Exploration drilling at Glendon began last week.
Drilling down to a depth of around 900metres.
Core samples are being taken for assessment.
An estimated value of $175 million a year.
The Hunter region’s potential is expected to far exceed the production of the Camden Picton area where Sydney Gas currently has 80 production wells.
Colin Stace said drilling at the Glendon site would take around eight weeks and a further three to four months before there would be a clear picture of the potential for the site.
In the Singleton district, three core holes have been completed at Bulga, Howes Valley and Mount Thorley. One hole is nearing completion at Belford and another is being prepared at Maison Dieu.
Following successful exploration drilling in Broke two test wells are currently operational and if this proves successful a production plant would be considered.
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Sydney Gas announces 25,000 PJ in the Hunter Valley
I wonder how the market will take this, if there are any buyers?
I wonder how the market will take this, if there are any buyers?
Sydney Gas announces 25,000 PJ in the Hunter Valley
I wonder how the market will take this, if there are any buyers?
I don't own this, but follow because of the link with AJL.
GIP of 25000 PJ. If they can get it to surface, bingo.
You would think it should be a good day tomorrow for SGL, and AJL.
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Some potentially positive news for a change.
The big question for me is how are they going to finance these developments - especially given the current financial markets? If through share offerings, what degree of share dilution might result?
Then there are the possible on-going ructions that might ensue from their battle with arch nemesis, the Hunter Bulga Gas Action Group, who will not be impressed with the plans and might step up their media campaigns. Bad press got SGL caned before, so I wouldn't be surprised to see them take that approach again.
Time will tell.
In 3-5 years we should know if all's well, I guess.
aj
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So.........
Finally some visionary news from a company that in recent times has spent too much time talking about the psat rather than today or tomorrow.
Look's like the share price is not going to move too much until financing arrangements for the "grand plan" are in place. We'll have to be a little more patient. I think AJL have a big role to play in all of this.
To buy or not to buy?
Bill
Finally some visionary news from a company that in recent times has spent too much time talking about the psat rather than today or tomorrow.
Look's like the share price is not going to move too much until financing arrangements for the "grand plan" are in place. We'll have to be a little more patient. I think AJL have a big role to play in all of this.
To buy or not to buy?
Bill
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The www.theherald.com.au is claiming:
"An estimated $10 billion worth of coal-seam methane gas or enough gas to supply Sydney for the next 150 years has been found beneath the Hunter."
http://www.theherald.com.au/news/local/news/general/valleys-10bn-methane-gas-find/1373248.aspx
"An estimated $10 billion worth of coal-seam methane gas or enough gas to supply Sydney for the next 150 years has been found beneath the Hunter."
http://www.theherald.com.au/news/local/news/general/valleys-10bn-methane-gas-find/1373248.aspx
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SGL should sign the reporter up as Chief Media Officer
Nice bit of propoganda? Back to reality, the SP responded briefly to the news then sank back to finish flat for the day. Hardly an inspiring reaction by those that count - investors / shareholders!
What the article totally fails to address is the ACTUAL LIKELY COST of getting to that resource and how SGL/AGL will fund the ongoing development in the short to medium term.
None of us know yet with any certainty, so maybe that's why the SP didn't go anywhere by the end of the day! It's hard to get carried away if the shares are going to be massively diluted in the short term chasing funds, eh? The best possible outlook is obviously for the new / upcoming SIS wells at Camden to flow and produce much better than expected and reap some actual profits more quickly in the nearer term. That sort of scenario might kick things along then.
Cheers,
aj
(still holding a few)
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Superb ann imo...dont be glum aj....mkt shellshocked...a bit slow to react. Ann made even better once a few figures are hypothecised. Do these figures seem feasible??...& a little exciting even...?
SGL have just announced 25000PJ of GIP for a section of accessible Hunter tenements surveyed….! Have stated that they will progressively prove up & develop in 500PJ Blocks and sell into the NSW market aiming for the JV to supply some 50% of NSW gas demand (!)
AND add LNG via Newcastle!!!!! A big leftfield part of concept yet to be digested …reinforces how much gas they are confident of recovering. These guys (ie,AJL) DO NOT ramp things up!...this wreaks of well-founded confidence
25000 PJ. Huge!... Compare this to Origins or STO gas resources…!
As a long-term follower, I can smell AJL’s understated excitement : SGL & AGL Energy (AGK) control all the Sydney Basin in 50/50 JV….huge tracts of coal-rich land from Wollongong to Newcastle that AJL are very familiar with.
Is worth chewing A few numerals re SGL & AJL….
1 Petajoule (PJ) = 1 million Gigajoule
GIP…..Gas-In-Place. Not all recoverable but AJL SIS technology maximizes recovery ….
Valuations for in-ground reserves as demonstrated by recent deals:
Petronas/Santos deal…$4.91/GJ of 2P; or $1.65 of 3P reserves
Origin Energy:….up to $2.12/GJ of 3P
Hence using $3/GJ of 2P relatively conservative
Gas sales ranges~$4 to $10/GJ. Aus mkt gas relatively cheap but that expected to change with ETS & gas-fired electricity; & LNG export to higher return Asian markets.
Each of the 500PJ of 2P is worth ~$1.5 billion in the ground once proved up to 2P by drilling; and potentially in excess of triple this on extraction & marketing (via AGL energy linkages). $10/GJ likely very achievable in future LNG markets.
A conservative 10000PJ recoverable to JV at 40% of GIP over project life at retail revenue of say $5 to10/GJ = $50 to $100 billion JV project cashflow range.
& this is potentially achievable on big margins given the big vertical integration advantages of an AJL/AGK/SGL alliance and proximity to Sydney/Newcastle gas mkt.
Financing?.Dont think that should be a major problem....Post Gloucester sale AJL will be cashed up...AJL's contribution via their holding of performance-linked options requires SGL's sp to reach certain (high currently) levels before exercise. Will this be renegotiated or supplemented to encourage AJL's input?
Alternatively AGL is cashed up or the possibility of a farmin party exists...a major with LNG aspirations maybe ...?
My speculation only...
SGL have just announced 25000PJ of GIP for a section of accessible Hunter tenements surveyed….! Have stated that they will progressively prove up & develop in 500PJ Blocks and sell into the NSW market aiming for the JV to supply some 50% of NSW gas demand (!)
AND add LNG via Newcastle!!!!! A big leftfield part of concept yet to be digested …reinforces how much gas they are confident of recovering. These guys (ie,AJL) DO NOT ramp things up!...this wreaks of well-founded confidence
25000 PJ. Huge!... Compare this to Origins or STO gas resources…!
As a long-term follower, I can smell AJL’s understated excitement : SGL & AGL Energy (AGK) control all the Sydney Basin in 50/50 JV….huge tracts of coal-rich land from Wollongong to Newcastle that AJL are very familiar with.
Is worth chewing A few numerals re SGL & AJL….
1 Petajoule (PJ) = 1 million Gigajoule
GIP…..Gas-In-Place. Not all recoverable but AJL SIS technology maximizes recovery ….
Valuations for in-ground reserves as demonstrated by recent deals:
Petronas/Santos deal…$4.91/GJ of 2P; or $1.65 of 3P reserves
Origin Energy:….up to $2.12/GJ of 3P
Hence using $3/GJ of 2P relatively conservative
Gas sales ranges~$4 to $10/GJ. Aus mkt gas relatively cheap but that expected to change with ETS & gas-fired electricity; & LNG export to higher return Asian markets.
Each of the 500PJ of 2P is worth ~$1.5 billion in the ground once proved up to 2P by drilling; and potentially in excess of triple this on extraction & marketing (via AGL energy linkages). $10/GJ likely very achievable in future LNG markets.
A conservative 10000PJ recoverable to JV at 40% of GIP over project life at retail revenue of say $5 to10/GJ = $50 to $100 billion JV project cashflow range.
& this is potentially achievable on big margins given the big vertical integration advantages of an AJL/AGK/SGL alliance and proximity to Sydney/Newcastle gas mkt.
Financing?.Dont think that should be a major problem....Post Gloucester sale AJL will be cashed up...AJL's contribution via their holding of performance-linked options requires SGL's sp to reach certain (high currently) levels before exercise. Will this be renegotiated or supplemented to encourage AJL's input?
Alternatively AGL is cashed up or the possibility of a farmin party exists...a major with LNG aspirations maybe ...?
My speculation only...
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That's the problem as I see it in the short term Col. It's mainly speculation ATM.
IMO it will only be after some "real" and "highly positive" Hunter and Camden SIS well production pilot figures start stacking up that shell-shocked investors will return in any numbers to SGL. More are likely to play it safe in the meantime by investing in AJL and AGK until the definitive 2P reserves (Camden and Hunter) are officially proclaimed?
I note that the HBGAG media stirrers have been quiet this past weekend following the big announcement. Wonder what campaign they might stir up after this "bombshell"?
Anyway, it's fingers x'ed for future success... the window of opportunity might not be that large with Carbon trading just about to hit the scene. (on that note, I wonder how much Carbon tax CSM producers will have to pay?)
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AJ, the AGM presentation suggests they have been hard at it & are confident of booking the first block of 500PJ 2P in 2010-11; and then in rolling 500PJ blocks.
Each 500PJ proved up & realised can achieve JV revenue at the well-head base-case ($3/GJ) of 1.5 billion as it is sold over say 5 years at 100PJ/yr. That reps a very conservative Hunter revenue to SGL of $150million pa. from 2013 (say); in addition to cash-flow positive Camden gas.
Success can be multiplied to say 300PJ/yr or more by stacking production of these 500PJ blocks...ie, enough to allow contemplation of LNG scale production.
The wayI see it, this series of anns were major events for SGL, AJL and also AGK. It was a long-gestated release of the new strategy with AJL at the controls....& AGK, & maybe even an oil major in the wings with funds in pocket.
SGL appears to have past the potential test (& undergone a share register reshuffle) and emerged way undervalued at 0.18/73mill, but with AJL & AGK committed to throwing all resources at Hunter & Camden NSW CSG may come into market focus soon.....
Holding all three...plus MPO is my diversification strategy.
Each 500PJ proved up & realised can achieve JV revenue at the well-head base-case ($3/GJ) of 1.5 billion as it is sold over say 5 years at 100PJ/yr. That reps a very conservative Hunter revenue to SGL of $150million pa. from 2013 (say); in addition to cash-flow positive Camden gas.
Success can be multiplied to say 300PJ/yr or more by stacking production of these 500PJ blocks...ie, enough to allow contemplation of LNG scale production.
The wayI see it, this series of anns were major events for SGL, AJL and also AGK. It was a long-gestated release of the new strategy with AJL at the controls....& AGK, & maybe even an oil major in the wings with funds in pocket.
SGL appears to have past the potential test (& undergone a share register reshuffle) and emerged way undervalued at 0.18/73mill, but with AJL & AGK committed to throwing all resources at Hunter & Camden NSW CSG may come into market focus soon.....
Holding all three...plus MPO is my diversification strategy.
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Col, I too am somewhat optimistic.
AJ, I’m also a little pessimistic.
The time of talking about the past is over. Andy Lucas must now be held to account for today and tomorrow. He has the technical team in place and is backed by a Board dominated by allies.
The relationship with local landholders remains complex but manageable. Andy appears to be quite conservative. This approach seems to have made it easy for the HBGAG to score points in the public relations battle simply because SGL is relying on results rather than hype to develop a small environmental impact footprint reputation. With results starting to flow SGL will be able to show that its operational activities do not threaten the community and environment. Moving forward, the disruptive nature of the HBGAG will become less significant.
The share price is a big concern. A weak share price restricts fund raising options, threatens the ability of AJL to take up the options that formed part of the deal formulated in January this year and calls into question the conversion of the B&B notes. On the positive side, the share price could move very quickly.
The NSW Government planning and approval process is dreadfully slow. This presents a near term obstacle in the Hunter.
Col, you touched on the AJL divestment of some of its CSG acreage. AJL are in the process of selling its interests in Queensland. The AJL Gloucester acreage is very close to the SGL Hunter acreage. AJL and SGL are very tight. One way for the relationship to become tighter were if the two businesses came together to develop the Gloucester area. AGL would not necessarily be part of this. Food for thought.
The disappearance of QGC could prove to be a big opportunity for SGL. BG’s focus will be on the export LNG market. What chance now of the pipeline from Queensland to the Hunter? Similarly, the disappearance of SHG into BG via its purchase of QGC also strengthens SGL’s grip on the NSW market.
It’s hard to speculate if any more news will be released this calendar year to clear the water. Like everyone, I’m keenly waiting for news about the financing arrangements to make the dream more tangible. It would be a bonus if there was some prospect of accelerating the development programme.
Anyway, I continue to hold lots of SGL. I’m on the sidelines for right now, but seriously contemplating buying more. After nine years as a shareholder, I still consider SGL to be speculative.
The above is my view only.
AJ, I’m also a little pessimistic.
The time of talking about the past is over. Andy Lucas must now be held to account for today and tomorrow. He has the technical team in place and is backed by a Board dominated by allies.
The relationship with local landholders remains complex but manageable. Andy appears to be quite conservative. This approach seems to have made it easy for the HBGAG to score points in the public relations battle simply because SGL is relying on results rather than hype to develop a small environmental impact footprint reputation. With results starting to flow SGL will be able to show that its operational activities do not threaten the community and environment. Moving forward, the disruptive nature of the HBGAG will become less significant.
The share price is a big concern. A weak share price restricts fund raising options, threatens the ability of AJL to take up the options that formed part of the deal formulated in January this year and calls into question the conversion of the B&B notes. On the positive side, the share price could move very quickly.
The NSW Government planning and approval process is dreadfully slow. This presents a near term obstacle in the Hunter.
Col, you touched on the AJL divestment of some of its CSG acreage. AJL are in the process of selling its interests in Queensland. The AJL Gloucester acreage is very close to the SGL Hunter acreage. AJL and SGL are very tight. One way for the relationship to become tighter were if the two businesses came together to develop the Gloucester area. AGL would not necessarily be part of this. Food for thought.
The disappearance of QGC could prove to be a big opportunity for SGL. BG’s focus will be on the export LNG market. What chance now of the pipeline from Queensland to the Hunter? Similarly, the disappearance of SHG into BG via its purchase of QGC also strengthens SGL’s grip on the NSW market.
It’s hard to speculate if any more news will be released this calendar year to clear the water. Like everyone, I’m keenly waiting for news about the financing arrangements to make the dream more tangible. It would be a bonus if there was some prospect of accelerating the development programme.
Anyway, I continue to hold lots of SGL. I’m on the sidelines for right now, but seriously contemplating buying more. After nine years as a shareholder, I still consider SGL to be speculative.
The above is my view only.
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Hi sillybilly.
IMO the project financing issue in the short term will be the No.1 factor driving the SP in the near future. With the economy the way it is atm, no-one is going to be confident picking up large parcels of shares NOW if there is going to be a not-so-surprising massive dilution as a result of funding options in the near term.
I totally agree that the sooner they get on top of that issue and clarify how SGL is going to fund it's share of all these massive developments the better! (like others, I'm sitting on the sidelines to see what eventuates - I've got some spare cash waiting for the opportunity).
Fingers, arms, legs & eyes x'ed it works out ok.
Chiz,
aj
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Sillybilly...nice points. Agree that controlling Gloucester + Hunter + Camden seems complementary & compelling.... I for one would like to see AJL retain some equity in Gloucester
The combination of existing/growing Camden flows;
an advanced Gloucester project....piped to Hexham with gas sales 2010.
AND Hunter gas to Hexham from ~2012 is a solid but achievable rampup both in volumes/revenue with plenty of scope beyond that.
A leftfield scenario.....
MPO 30% cashes out of Gloucester to (say) AGK
AJL sells 20% G to AGK
AJL increases stake SGL in return for financing+drilling and eventually consumes it
This will leave AJL/(SGL) & AGK in an effective 50/50 JV over the entire Gloucester & Sydney Basins; with maximum vertical integration benefits within the JV, & relatively easy access to infrastructure & markets at a prime time...
I tend to the optimistic, see positives for sp's of all 4 players mentioned...but think AJL best positioned to benefit ultimately if they play their cards strategically, and dont get spooked into selling down control too soon.
The combination of existing/growing Camden flows;
an advanced Gloucester project....piped to Hexham with gas sales 2010.
AND Hunter gas to Hexham from ~2012 is a solid but achievable rampup both in volumes/revenue with plenty of scope beyond that.
A leftfield scenario.....
MPO 30% cashes out of Gloucester to (say) AGK
AJL sells 20% G to AGK
AJL increases stake SGL in return for financing+drilling and eventually consumes it
This will leave AJL/(SGL) & AGK in an effective 50/50 JV over the entire Gloucester & Sydney Basins; with maximum vertical integration benefits within the JV, & relatively easy access to infrastructure & markets at a prime time...
I tend to the optimistic, see positives for sp's of all 4 players mentioned...but think AJL best positioned to benefit ultimately if they play their cards strategically, and dont get spooked into selling down control too soon.
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