EPG 0.00% 41.0¢ european gas limited

You're welcome. The fact did not escape Maoming's notice and no...

  1. 43 Posts.
    You're welcome.
    The fact did not escape Maoming's notice and no CEO has vocation to keep his job forever. The situation could be corrected at the very next AGM.

    Staffing is a wonder at EPG. Looks like they try to run a Company with nephews of the cousin, golf partners and friend of a friend. At some point the experience has to be taken into account and the salaries/benefits have to be consistent with the market and resume. (Some won't be happy as I know some read me... But they can't deny the reality. There's a couple of Diva onboard).

    I am not a trader so the target price question leaves me blank. Just a couple of ideas fwiw.

    If I had to put a price on EPG, I would forget most of the projects and base on Gazonor prospects only for the added value. The potential added gas flow is real and not too far away, technically and financially and administratively.

    In addition, the JV with transcor could reveal that there is a potential just across the belgian border that is equal or greater than Gazonor. Transcor would be financially an ideal partner to develop the belgian play.
    But I guess that GDP is still wondering if Transcor can trust EPG to manage the technical part. EPG market price has been the cause of some holes in the accounts of Transcor last year and it is not sure that it will be willing to continue the deal after 2010...TBF.

    The Lorraine project is technically highly challenging, It is doubtfull IMO that EPG will have great success there and if it does the entry ticket will doubtless be (too?) high. EPG has already spent about 15 million euros there and is still not able to prove that it can flow some gas. I will revise my opinion if they do, but currently Lorraine is a burden more than a bonus. It enters negatively in the valuation with big financial commitments.

    The Jura will probably be a dead end unless EPG hits gas targets at first or second drill. Oil would be nice on a CV but it would cause a lot of problems for EPG. It is absolutely not in condition to deal with sour O&G drilling, production and commercialization. I do not mean to be rude but this is a job for professionals. There still is a potential for CBM anyway, so I would value Jura for 20% max of the potential that will be claimed by EPG until they prove producible gas.

    My feelings about Gardanne have been expressed in a previous post. The JV with FUT changes the scope of burden and reward, it will bring no added value but will not cost much, either. So, not much effect on valuation. At least the FUT participation will pay the financial commitment.

    St Etienne is a dead End, EPG should release it asap to avoid wasting money and credibility.

    Italy is fine for pasta... well joking, there is a gas potential here but EPG is in no position to work there at the moment. The statu quo regarding admin. is therefore welcome and if FUT can spend money there, why not? But it brings not much value for EPG and will not if FUT takes 70% of the share in it.

    As you can notice, it is mixed. Gazonor deserves to be backed with strong SP but the others propects are imo very risky and this degrades the price. The balance point is hard to find and a lot of subjectivity enters into it.

    Not sure it can help much... but if it does, I am happy with that.

    Cheers
    Z



 
watchlist Created with Sketch. Add EPG (ASX) to my watchlist

Currently unlisted public company.

arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.