Finance and Forex Trading Forum

Jonathan · Guest

http://aussiewealthreview.com/?p=147
Published May 16th, 2008 in Diary, Share Trading.

Past gas prices, low.

Future gas prices, high.

Gas profits, up.

That's today's story in ten words. Add the picture, it's 1,010. That's our
word limit for Money Morning. Hmmm.all these other words should count as
overtime. Time to talk to payroll.

Past gas prices, low.

Future gas prices, high.

Gas profits, up.

That's today's story in ten words. Add the picture, it's 1,010. That's our
word limit for Money Morning. Hmmm.all these other words should count as
overtime. Time to talk to payroll.

Have you noticed that natural gas prices have broken double figures.yet
Aussie prices haven't broken $3.50 for years? Gas futures in New York are
trading at $11.44. John Durie of The Australian, reckons Aussie gas
wholesales for about $3.

Why so?

It's simple. We have a lot of wide, open space, and not many people.
Australia's total gas reserves are massive. That makes production cheap, and
plentiful if we need it. For example, in 2007 we produced 79 billion joules
of gas per person. The US produced 72 billion joules of gas per person, so
Australia produces 10% more on a per-capita scale.

But we're exporting surplus gas. And the US has to import more from Canadian
pipelines and foreign LNG shipments, to keep everyone warm and well-lit.

Given that BG and Origin are looking to build a new LNG exporting facility
to go with Santos', the gas price will probably change. Sending our gas
overseas will mean there is less here for us. Zip. Price goes up.

Some commentators expect gas prices to triple, which would bring us up to
speed with the price in New York. We've used 2014 in the graph above,
because that's when Santos says it'll finish the facility.

You can invest in this a couple of ways. There are gas producers, who will
make a better price at the well-head from higher demand. That would mean
Santos (ASX:STO). A couple of smaller fish are Sydney Gas (ASX:SGL) and
Molopo (ASX:MPO) if that's more your style.

There are also gas retailers who will raise retail prices to account for
this.

Some gas retailers, like Origin (ASX:ORG) and AGL Energy (ASX:AGK), are
drillers too.they'll be piping the stuff then selling it at retail prices.
That means bigger profit margins.

But our favourite idea is neither of these. It's in the Queensland coal-seam
sector.

Coal-seam gas accounted for around 1,800 petajoules of gas energy in 2007.
Santos reckons the new exporting facilities will ship 550 petajoules of
coal-seam gas overseas. That's almost a third of last year's production.

Add to that the fact that Queensland natural gas demand is forecast to grow
at over 4% for the next 25 years. That means it'll triple. Everyone wants
gas. Coal-seam methane should turn out to be a lucrative option in years to
come.

A few producers like Queensland Gas (ASX:QGC) and Arrow Energy (ASX:AOE) do
nothing but coal-seam production. They're pure plays. Specialists.

We've drilled down a little further for Diggers and Drillers subscribers.and
asked ourselves a different question. Who's going to be developing all those
wells? You might be surprised to find that it isn't necessarily the
companies who own and operate them.

http://www.aussiestockforums.com/forums/showthread.php?t=1963&page=3

Anyway, as I see it, in the short-medium term the only way SGL's Share Price
will LEAP forward in any meaningful and long term way (regardless of SP
fiddling by Chimaera et all) is:

(a) prove up substantial Hunter region reserves (15c+?)
(b) obtain a full production licence for the Hunter leases (25c+?)
(c) prove up substantial increase in Camden reserves (10c+?)
(d) obtain maximum payment from AGK (abt $AU50m) for sufficient proved up
Camden reserves (10c+?)

Given the current SP near 40c, if all those things can come together by the
end of December (after which the Camden reserves payment by AGK will be
calculated), I reckon there is potential for the SP to have moved to near
$1.00+ It's all a bit in the lap of the gods, as well as Andy Lukas lap!

Jonathan · Guest

QGC has announced plans to build a new gas-fired baseload power station in
NSW that would underwrite the economics of an 820-kilometre gas pipeline
between its Surat Basin acreage and Newcastle in NSW.

Sydney Gas (SGL) jumped up 13.25% today to 47c. I noticed this BIG single
trade on Commsec:
03:49:45 PM 0.440 10,000,000 4,400,000.00 XTSPOS

According to Commsec's Code help, I presume the code letters mean:
XT = Crossing Trade
SP = Block Special Crossing
OS = Overseas

So, would I be correct in guessing that some overseas entity has been
involved in a single trade of 10,000,000 SGL shares (at .44 per share) for
the total princely sum of $4,400,000?

QGC's move into NSW will accelerate consolidation of positions.
Significantly the proposed QGC pipeline route will travel through SGL's high
prospectivity/priority very sizeable Hunter tenements and therefore raises
all sorts of scenarios that may play out... tommorrow will be interesting.
http://www.aussiestockforums.com/forums/showthread.php?t=1963&page=3

Two years ago, when Queensland Gas Company was a relatively small company
just about to produce its first gas, Cottee launched an ultimately
unsuccessful bid for Sydney Gas. The bid might have failed but it provided
an insight into Cottee's strategic thinking and ambitions.

QGC's coal seam methane resources are close to both the Queensland
electricity grid and the Roma-to-Brisbane gas transmission pipeline. The
idea of the Sydney Gas bid was to acquire a group similarly close to the
electricity grid and a gas trunkline, creating more opportunities to
commercialise coal seam gas and the ability to exploit arbitrage
opportunities between the two states markets.
http://www.businessspectator.com.au/bs.nsf/Article/Cottees-magic-pudding-F2AH7?OpenDocument

"Jonathan" <joansdf> wrote in message
news:483404cc$0$13945$afc38c87@news.optusnet.com.au...