From Australian CSM Review 6 June 2007Sydney Gas Ltd• The stock...

From Australian CSM Review 6 June 2007

Sydney Gas Ltd

• The stock looks inexpensive from an earnings perspective, relative to others in the sector
• While SGL does not have the ultimate resource potential of AOE / ESG /QGC it does have a well priced GSA with AEG L
• It also has demonstrated that the horizontal SIS Wells appear to have worked technically. This has the potential to add value - both from booked reserves and production rates.
• The PEL' S. controlled by SGL/AGL include deeper conventional plays - as evidenced by the recent EM 31 exploration well. The target is the Marrangaroo conglomerate, with a gross thickness of 9m. While “low perm”, we note that SGL/AG K will fracture stimulate EM31, with further testing planed.
• We notice that SGL has two major shareholders - AEG L. and Babc ock's. Perhaps SGL is “in play”