Here's what I managed to jot down while listening. Note: I am not very good at multi-tasking between listening and typing (thank goodness I didn't choose scribing/note-taking as my career), and my shorthand really sucks because I don't understand some of the crap I typed a few minutes ago
Let's go straight to SE...
SE3 very likely hit GWC. SN pointed out that GWC is very subtle to detect and not something that most companies would spend capital to go look for specifically. However, now that they believe they have hit it, they will shoot some logs (can't remember the name of the logs he mentioned) to determine the precise GWC. The one good thing about knowing the GWC is that it will enable them to really tighten up their modelling. They have several forward options with SE3 - pull back plug and retest, or drill a sidetrack.
Due to SE3's failure to flow, they will have less data points to provide for reserve certification. It is likely to be put on extended production testing to (1) gather additional reservoir connectivity data (2) to give them confidence that SE phase 1 development can be supported by 2 wells instead of 3. He mentioned that Beharra Springs production of 25TJ/d has been supported by 1 well for the last 3 years. FID is dependent on reserves and how much connectivity each production well has to its reservoir (how long it can support production basically). Once they have more well data and the reserve numbers, they will determine whether they need to drill another well to support the gas processing throughput. It's not on the critical path as the gas processing plant will take 16-24 months to construct anyway.
With SE2 put on Extended Production Testing (2-4 wks perhaps), reserve certification will likely be end of current qtr.
Moving onto other assets and drilling schedule...
Drilling order is - W7 (April), ED1 (May), SWE1 (Q3 - so July/August), OH (contingent - Q4)
W7 has the potential to double the Walyering reserve. The redundant production capacity will allow them to upgrade various safety and other systems at the site in order to support future increase in production. SN also went into some details around the production bottlenecking. Parmelia pipeline had been running at a pressure of 950psi while Walyering is producing at 3000psi. This has caused some issues with the gas handling capacity of the pipeline. Additionally, a lot of customers (Alumina was mentioned) hadn't upgraded or maintained their inlet points for years. This work is being done by gas customers in order for them to be able to accept more gas.
Drilling of ED1 and SWE1 can add significant amount of new reserves to WE field. Contingent on drilling and appraisal results, FID for WE's 87TJ/d will be Q3 this year. It may be upgraded depending on policy change, updated reserve numbers, etc. First gas targeted for 2026.
OH was mentioned by SN as the big lever because it is largely ignored by analysts (glad he is on the same page as me on that one). Its 306PJ and associate condensates potential is massive. It is 4km from the DBP, which serves the LNG market to the north and WA energy market to the south.
On the overall energy market and policy change, the biggest driver for gas demand will not be the industrial users, but the WA electricity generation. The coal powered plants are in such dire state that govt is pumping a lot of money to keep them running. So the govt has ample commercial reasons as well as environmental ones to shut them down as soon as possible. SN also re-stated that STX shouldn't be subsidising the industrial users and their shareholders with cheap gas. STX has a critical role to play in WA's energy transitional needs for the coming decades, and it is in the WA's best interests that STX is commercially successful to be able to bring those additional gas to the market.
He closed by saying that the journey to a successful outcome is always full of ups and downs, but STX has the right commodity in the right market to be successful, and the team is laser focused in ensuring that successful outcome.
Take away what you will from my very suspect note-taking
618
STX Price at posting:
32.0¢ Sentiment: Buy Disclosure: Held
(20min delay)