STO, page-10

Hi Pear,

The arrogance of previous STO management is well known in the oil industry who happens to deal with them. Imagine someone is working for Santos in Adelaide, he is pretty proud of himself to be part of a major of South Australian economy (maybe he would feel the same if he works for BHP in Melbourne or Woodside in Perth). Or may be I am too sensitive. But being part of a big company, especially the biggest and most influence in town, I would likely pick up a few arrogance!

I however need to say that it has been changed under the new CEO. He specifically mentioned that STO needs to be good at dealing with the reservoir/geology when he took the office. Something was wrong with the previous technical team. Probably the best in town attitude made them forgetting that they need to improve. Cooper basin is a high cost business. He turned that around, making BPT profitable from the way STO operates. Same for GLNG coal seam gas drilling, completions and increased production.

For now, STO and OSH has similar market cap, net debt with STO having better free cash flow, better asset value, reserves, resources and the good upside with the LNG business. Switching off coal fired monsters is the real trend, replacing it with natural gas is the better option in short to medium term before renewable energy be able to replace it.