I was looking at the AOE announcement regarding the reasons for...

I was looking at the AOE announcement regarding the reasons for their acquisition of PES.
In summary these were (and I quote)(from AOE 22/12/08):
"Acquisition Rationale:
1. Expanded reserves position/ acceleration of LNG - the addition of PES reserves gives AOE suficient 2p and 3P reserves to underpin 2 LNG trains; 3p reserves position will help accelerate expansion,
2. Strategic Fit - PES permits adjacent to pipelines, PLUS acquisitions consolidates Arrow's farmin/JV with PES,
3. Capture additional Pure reserves upside which can be quickly commercialised - Pure has outperformed reserves targets, PLUS expects reserves upside which can be quickly commercialised via Arrow facilities,
4. Continued Growth - provides substantial flexibility in power gen and LNG project PLUS significant expansion of reserves position,

THE POINT IS that all these "rationale" issues apply to BG/QGC's position in relation to WCL.
QGC is the 50% J/V partner in each of WCL permits of Tillbrook and Paranui.
Each of PAranui and Tillbrook have a pilot program well underway to prove-up reserves.
In Tillbrook the directors have discovered that the northern extension of Tilbrook has exciting CSG potential in areas known as Bald Hills and St Martins. A Coal Coy wants to access one of these permits for a mine, so that indicates potential of coal in the permit.
All of WCL permits are almost on top of pipelines.
None of WCL potential reserves are yet contracted.
Reserves confirmation is imminent.
"Strategic fit" with BG/QGC is a no-brainer,
WCL register is wide open,
WCL has two seed investors - Bumi Coal and Saad Investments. One would imagine that Bumi Coal would be happy to swap association from WCL to BG/QGC expertise, particularly at a profit. Same for Saad Investments noting Saad was the largest s/h in Sunshine Gas, and sold out to QGC earlier.

The only issue, as I see it, is WCL lack of proven reserves. That should be resolved imminently - WCL have stated that results should be announced early 2009.

Hold on to your hats - more consolidation should be coming.

Cheers.