late mail - and no wonder!!, page-7

re: overreaction. mikieboy Hi Otaw,

Everything there is to know about SGL is exposed to the market. They have world class acreage, with an enormous resource in place that is unquestioned. They have two gas plants up and running and are selling gas to AGL as we speak. They have agreements with AGL for up to 120 wells, at the moment I think they are only producing from 20 or 30. AGL have loaned them money for further drilling which lessens the likelihood that they will need to raise further capital anytime soon.

They are having a few problems with publicity at the moment in regards to landowner's compensation for drilling on their land. Some well known figures such as John Laws and an ex NSW premier are making some noise, whilst this is a nuisance factor I am not overly concerned or believe that it will intefere with SGL's long term ambitions.

They have proven their ability to extract the gas and in my opinion are moving along nicely in their development. They are also miles ahead of any other Coal Bed Methane producer in Australia. I expect that within the next 12 months they will become cash flow positive and will then be significantly re-rated by the market. However for them to reach the potential that I am expecting it will probably take another 5-10 years or so (who knows they may even be taken over within this time)...

If you are looking for a short term trade then you will be able to do better than SGL, however I am not a short term trader, I prefer to treat my shares as I would an investment property.