I think that is pretty reasonable. Probable portfolio balancing...

I think that is pretty reasonable. Probable portfolio balancing going on at present.

A TLA (Three Letter Acronym) sums up present situation : FUD

Fear, Uncertainty and Doubt. Its a double edged sword.

As a long term bullish investor on COE my
Fear:
1. Australian Gov't legislates in such a way that causes shareholder value destruction (share price does not rise by more than the expected return given the risk). We've already seen the preview (and hopefully that's all).

2. COE is not a truly experienced and proven offshore gas operator and some event causes our assets to be "impaired" (at best).

Uncertainty:
1. Will the drill results for both Sole wells deliver the required flow rates to support 2o PJ pa for 7 years of long term GSAs and a total of 24 PJ pa for 10 years

2. Will a (new) competitive resource be developed at less cost than Manta and remove the real upside

Doubt:
1. Can (present) other options "mind the gap" and takeaway opportunity to further contract long term GSA from C-H.

2. What if GPG (Gas Powered Generation) demand really does not materialize (yeah I know this is a renewables argument but GPG demand did go down due to renewables and went up due to Hazelwood coal, but that overall argument of what amount of baseload from reliable sources is finely balanced).

3. Trend for electricity demand and the demand for gas for manufacturing.


If I had to criticize COE mgmt (DM), it would be that COE is not pounding the street hard enough to send the message that SOLE (and C-H) are the most cost competitive projects (see slide 11 from Nov Investor pack) available to eastern Australia customers - meaning quite simply if you don't buy our gas you will pay more. And not to be a dick about it, we only have a certain amount to sell so first in, best dressed and don't expect a cheap price, expect a fair price for the long term given the cost of capital, the risk involved and the returns that investors expect commensurate for risk. Otherwise we'd all be putting capital into bank shares.

FWIW