ESG 0.00% 86.5¢ eastern star gas limited

commercial and corporate

  1. 3,666 Posts.
    It seems the market is waiting for more news on the commercial front from ESG.

    Reserves are powering ahead. Flows are excellent. But the market needs to see, in a concrete way, where the sales are going to be coming from.

    However, I think there is a balancing act ESG need to perform. Just imagine that, tomorrow, ESG signed a very large MOU of some sort with Santos, committing large amounts of gas to them. What would happen?

    Well, two things I think. It would allow for the booking of higher 3P reserves. But the market wouldn't like that, because, strategically, it would lock ESG in to one potential buyer - Santos. So what they would gain in terms of commercial certainty, they would lose in strategic value.

    It is unclear who is holding off on a commercial deal of some sort between ESG and Santos. One thing is clear - since buying in, Santos have gained no firm deals, in 8 months.

    We should support ESG in carefully managing the commercial and strategic balance. Do you want a quick win on the commercial front, which ultimately degrades the multi-party appeal? Or do you want to wait, and have mutliple parties needing to acquire ESG to secure the gas?

    Yes, we want ESG to defend the price now, and give the market something. But we don't want them doing anything unwise, just for a quick win either.


    It seems to me that ESG is waiting, maintaining its virtue, until the wedding night.

    Y
 
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