Bottom of the Barrel Valuation, page-73

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20/02/24

20:11

Post #: 72505221
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Originally posted by 618: ↑

Ok, so I've written off all 2C at SE...

As it currently stands, STX is trading on an EV of just 568mn. Given Hancock paid 420mn for WGO, let's value our 50% of EP469 at 420mn for the time being, or 2.10/2P GJ - ignoring the fact that STX has the operatorship and ED1 and SWE1 has a combined 2U of nearly 500PJ. So this leaves 158mn of EV being attributed to 52PJ and 0.55mmBOe of condensates and 128PJ at SE1, which is 98c/2P GJ.... even though Walyering should be valued more because it is producing and at a significant profit margin.

It is times like these that I simply ignore the noise and focus purely on the numbers, rightly or wrongly. The current price levels is not just limiting SE to 128PJ, it is discounting all of STX's reserve to just 8.91/BOe, or 1.48/GJ as well as discounting all of ED1, SWE1, W7 and OH to zero.

Contrary to what some others may wish for, I genuinely hope no one will take a stab at STX although I am sure some of them would be running it over their rulers as I type. If a bid does eventuate, I am sure they will use SE2/3 as the basis for their low bid, citing SE2/3 demonstrates nothing is certain in O&G to justify paying nothing for the rest of prospects. While the SN and board can't control how the reservoir behaves, it can certainly show some courage in rejecting any crappy offer that may come.

618

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Unfortunately, board will have no say..Big shareholders and insto's will be livid by this. They will demand heads roll. Lucky to get 35 now.

STX Price at posting: 21.5¢ Sentiment: Buy Disclosure: Held
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0 Great analysis

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