Indeed technology is moving on and it is possible to increase flowrates dramatically with those advances but it still comes at a cost compared with simple completions. Also need to take into account the dewatering of the coals in the Bowen compared to those in the Surat.
As for the pipeline, one of the main issues with it is the terrain, which isnt as flat as that leading from the Surat to Gladstone. You have to ask yourself why AOE would itself choose to pipe gas from their Surat fields and not those in the Bowen.
It is possible that i have relied to heavily on one conversation, but without a higher bid the AOE sp is going to trade in a narrow sideways band given the uncertainty over the value of Dart and the deal not closing until August.
If a higher bid does emerge and i miss out on an extra 20-30% then so be it, i am more than pleased be walking away with triple digit gains.
s.loeb
AOE Price at posting:
$5.17 Sentiment: None Disclosure: Not Held
