Well, from my own recent (appropriate) enquiries and the recent (appropriate) enquiries of one other, I will post what I interpret may be the case ... given the poor performance of EPG for a frustrating 12 months or more, do not rely on this post for any investment decisions.
# EPG do own a producing coal mine methane (CMM) asset in Gazonor ... reserves have been upgraded significantly whilst the sp has been downgading ... there are considerable coal bed methane (CBM) reserves associated with existing and recently acquired permits at Gazonor that were not reflected in the Gazonor purchase price.
# EPG do own significant prospective permits in Lorraine and Lons le Saunier in particular.
I would expect fairly bouyant March Quarter gas sales ... in price and volume ... it makes sense for this time of the year in Europe, all the ructions in energy supply in Europe, the reserves upgrade and some long term sales pricing is due for renegotiation soon I recall.
In tough credit times, it makes great commercial sense for EPG to increase its cashflow by financing some reciprocating motors to produce electricity from additional CMM production that is almost certainly feasible, particularly since the French Govt view use of CMM as a greenhouse gas abatement measure and provide significant commercial incentives.
Even wearing my most rosy rose coloured glasses, commercial CMM upgrades at Gazonor will not fund the kind of exploration budgets required to investigate and develop CBM reserves at all of Gazonor, Lorraine and Lons le Saunier.
Lons le Saunier has conventional gas (and oil) targets in addition to expected vast CBM resources ... from the beginning, EPG management said partners were required to release value at Lons le Saunier ... so, I expect something along these lines to be announced sooner than later, hopefully initially for the conventional gas/oil targets and CBM in the longer term.
Whilst Lorraine has been frustrating, I take at face value that investigations will continue when funds can be secured. A review of most Australian CBM'ers shows it takes time and money to develop technical strategies to release gas from alost every basin, and no two basins are alike ... certainly, no information has been released (that I am aware of) that suggests gas cannot be comercially released at Lorraine ... to the contrary imo.
A preferred outcome imo would be good farm in terms for a portion of Lorraine and also initially for conventional gas/oil targets at Lons le Saunier whilst using an optimised cashflow from CMM operations at Gazonor to investigate and develop CBM resrves at Gazonor.
What I want and what I get may bear no resemblance though lol.
Cheers all Dex
EPG Price at posting:
16.5¢ Sentiment: LT Buy Disclosure: Held
