SGL - Sydney Gas

[Aussiejeff]

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.

Hi Col.

I think you should approach Andy for the Director of Strategies job!

Good points...

 

[Col Lector]

Having said that....the market evidently doesnt agree with sp down 10% since opening. A concerted seller evident recently but picked up pace this morning. Good pickings...?

 

[Aussiejeff]

Having said that....the market evidently doesnt agree with sp down 10% since opening. A concerted seller evident recently but picked up pace this morning. Good pickings...?

Makes you wonder how many shares might still be held and being sold down by dis-gruntled former SGL wheeler-dealers & executives?

 

[Col Lector]

Hard to fathom the selling given the recent flow of good news.... looks like a forced offload ....BB?

 

[sillybilly]

Guys,

The trades today we're seeing are quite large. At 11:23am 555000 shares went through. This is not your average "mum and dad" trade.

On and off for the past month or so there has been heavy selling of SGL. Some of it is the result of margin calls. Apparently, one of the SGL directors has been the victim of a margin call.

There must be at least one top 20 shareholder getting out for one reason or another. I don't think it would be B&B - they would have to release an updated significant shareholder statement.

An equally interesting point - who is soaking these shares up?

I'm resisting the temptation to buy more........for now.

Bill

 

[Aussiejeff]

Guys,

The trades today we're seeing are quite large. At 11:23am 555000 shares went through. This is not your average "mum and dad" trade.

On and off for the past month or so there has been heavy selling of SGL. Some of it is the result of margin calls. Apparently, one of the SGL directors has been the victim of a margin call.

There must be at least one top 20 shareholder getting out for one reason or another. I don't think it would be B&B - they would have to release an updated significant shareholder statement.

An equally interesting point - who is soaking these shares up?

I'm resisting the temptation to buy more........for now.

Bill

Seems like waiting it out is the go.

Down 2c already.

 

[Jonathan111]

bad day for buying today (or good?)

there was a large sale yesteday 5 million shares

Achievement of SGL’s target of JV 1000 PJ in 2012 implies a minimum share price uplift for SGL to ~$1.85/share (page 18 of investor updte)



Asia CBM Forum 2009 Hear from an Expert Panel of Speakers, including: Andrew Lukas Chief Executive Officer SYDNEY GAS LTD 23, 24, 25 February 2009 REGISTER BY 12 DEC AND RECEIVE 15% OFF! http://www.alleventsgroup.com/cbm/cbm.pdf

 

[Aussiejeff]

Up to 20c last time I checked - almost 2 million shares traded today.

If it closes at 20c or higher, might even start to head north for a bit. Pure guesswork atm with this one given atrocious past management. When shareholders have been badly bitten and scarred, it takes a LOT to convince otherwise.... all the *signs* are looking positive. Have to see over the next few months whether it is a sustained bounce.

Still holding. Like Rip Van Winkle.....


aj

 

[sillybilly]

Hopefully, the large cross trade on Wednesday signalled the end of the selling that has contributed to the depressed share price since November. There has been a marked improvement in the buying depth. Mind you, his has happened before..........many times.

I'll be surprised, but not disappointed, if any significant news comes out before the end of January. Just my opinion.

Fingers crossed.

Bill

 

[Jonathan111]

I found the attached chart on the net, not sure who published it, but here it is.

A few questions

1. How do you know the directors were margin called?

It is often said in the industry that 1P (Proved) Reserves can be borrowed against, 2P (Proved and Probable) Reserves can be contracted and 3P (Proved, Probable and Possible) Reserves are an indicator of future potential.
http://www.qgc.com.au/01_cms/details.asp?ID=74

Sydney Gas announced it had defined 25,000 petajoules of gas in place in its exploration areas within New South Wales’ Hunter Valley......
.....Mr Lukas said Sydney gas had already conducted significant drilling in the region to prove the resource (ASX AND MEDIA RELEASE 27 November 2008)

2. What type of reserve is the 25000PJ? (7P,3P,?)

3. Is it reasonable to expect to extract only one third of this 25000PJ? or are sgl over/underestimating? (refer page 10 of investor update dec 08)

4. There seems to be way more gas in reserves than NSW needs. Is there really a market for this gas else where? Isnt the gas a bit more pricey than other forms of power?

It seems possible that AJL may meet their performance targets which are linked to their options exercised in 1.5 or 2.5 years upon Sydney Gas achieving an increase in 2P reserves by at least 75PJ and 150PJ respectively and an increase in the share price to at least 60c and 75c. Looking at their asx release SGL plan to have 70PJ (2p) by end of 09 and 200 PJ by mid 2010. (investor update dec 08).

Still speculative but getting closer.

 

[Aussiejeff]

I found the attached chart on the net, not sure who published it, but here it is.... Still speculative but getting closer.

Closer to ... bankruptcy?

That is one horrible looking graph, Jonathan. I didn't need to see how poorly the SP has been performing - again!

Still clutching some remaining SGL "fortune" cookies. LOL

Have a Merry Xmas, mate!


aj

 

[Jonathan111]

Stocks bought cheaply may become great outperformers when the market reappraises their worth, because not only do they recover to the old point, but they may go much further in line with the growth the company has experienced in the interim. If the stock is bought at 40% below (20c)intrinsic value(underlying perception of its true value 32-34c), and intrinsic value increases by 10% over the next couple of years, the stock will need to rise 65% just to fairly price the security. Typically though the market will over-react from time to time and overprice the security by a 10% premium to intrinsic value, meaning that the stock will actually rise 80% (36cents).

Why would they leave all that gas in the ground? I think they have been oversold and can easily raise the funds to prove up the reserves and start production..

i hold and am buying under 20c.

 

[Aussiejeff]

Stocks bought cheaply may become great outperformers when the market reappraises their worth, because not only do they recover to the old point, but they may go much further in line with the growth the company has experienced in the interim. If the stock is bought at 40% below (20c)intrinsic value(underlying perception of its true value 32-34c), and intrinsic value increases by 10% over the next couple of years, the stock will need to rise 65% just to fairly price the security. Typically though the market will over-react from time to time and overprice the security by a 10% premium to intrinsic value, meaning that the stock will actually rise 80% (36cents).

Why would they leave all that gas in the ground? I think they have been oversold and can easily raise the funds to prove up the reserves and start production..

i hold and am buying under 20c.

No longer

22.5c today.

Well, I'll be. A whiff of life about the old girl - SP now up +45% since 02 Dec. Not bad considering the general state of the market (mind you, it is likely waaay undervalue if those reserves pan out in the future).

Holding...

 

[phong_01]

does anyone have any ideas about the recent run in share price? also look at the trading volume, it's not the normal trading volume of SGL?

 

[Aussiejeff]

does anyone have any ideas about the recent run in share price? also look at the trading volume, it's not the normal trading volume of SGL?

Well, maybe it all comes down to the fact that the current management has actually lasted a few months and finally given an air of stability to the company. Allied to that the potential for some mega earnings IF their projected findings and development processes actually come to fruition without any major hiccups.

In other words, a faint air of optimism for SGL after years of total mis-management, gloom & doom? Increasing volumes might actually become the norm in the future?


aj

 

[Jonathan111]

In other words, a faint air of optimism for SGL after years of total mis-management, gloom & doom?

aj

Previous management had more gas coming out of their ringers than the wells.

A good day for SGL, reached 28c.. I think its still cheap from a long/medium term perspective..(as long as they prove up their wells)

I hold and want more..

 

[Aussiejeff]

Previous management had more gas coming out of their ringers than the wells.

A good day for SGL, reached 28c.. I think its still cheap from a long/medium term perspective..(as long as they prove up their wells)

I hold and want more..

Yup. Definitely a positive sign today (for AJL too) when many other energy stocks took a bit of a battering.

:santa:

 

[Col Lector]

Giday Aj,Jonathan,sillyb...Mmmm some Christmas cheer...19%+
s worth!. Not a bad day for the suffering faithful...4 consecutive up days. 27.5 cents a better number than the 15c December trough imo

The AOE/PES takeover (trading halt today) of scrip/$ values PES at >$600mill. Imo has to add further ++ve impetus to the AJL/SGL story given that PES has big acreage, but is a relative late-comer to proving up reserves...
Today's close of 0.275 values SGL at ~$110mill only which suggests "some" upside...
I also hold and ardently desire more..

 

[Jimminy]

gee we didn't have to wait long for the next CSM takeover.....!!

SGL in trading halt. Not too sure who it is yet. But no surprises, ESG now firms even more as t/o material.

As Bill Lawry says - "it's all happening here"!!

 

[sillybilly]

Well, well............

Takeover bid for SGL to be announced in the coming days. I assume AJL is the other party. Both are due to exit trading halts next Monday.

Bill