I would have thought the something like 50% increase in P1/P2 CMM reserves to something approaching 200PJ in Gazonor and the booking of Contingent Reserves of about 8500PJ for CBM for the wider project represented a significant increase in value over what EPG paid for using the convertible notes.
Also, from announcements/comments over the past few years I recall that we are approaching a period where there may be less inherited restrictions on gas sales and pricing at Gazonor ... ie I reckon there is some prospect of increased sales and prices for some current production ... lets just wait and see the March Quarterly figures.
Also, I think you will find the convertible notes relating to Gazonor mature towards the end of 2010, giving reasonable time to add further value to the project.
Based on the above, there is a good chance there has been reasonable appreciation in the asset valuation since Gazonor was purchased by EPG. As it is a going concern with certified reserves, a production licence and a cash flow it could reasonably be expected to be a bankable asset imo.
Personally, I would like to see partners brought in for parts of Lons le Saunier and Lorraine (refer to my post of a week or so ago) and EPG spend their own money on expanding CMM production at Gazonor and further developing characterisation of the Gazonor CBM resource.
Cheers Dex
EPG Price at posting:
16.5¢ Sentiment: LT Buy Disclosure: Held
