Interesting trading today. I don't often get a chance to dive deeper and watch what is happening, but a day off work gave me the time to sit and watch the machinations. Was a lot of CXXT trades, mid point etc... not much moving the dial, surprisingly ho hum.. until that big line wipe in the late arvo, thanks Elliot5. For fun I decided to put a 50k sale at 19.5c, just a half pip above the 19c last sale. It sat at ~20 in the "position in market"... And then, a flurry of sellers came over the top like a tsunami... and I was pushed down to ~100+ in the queue... with some big iceberg sells of 1m & 2m to help cap things. My order never got filled, but my experiment provided me some evidence that IMO as soon as things look set to run higher i.e 19c+, magically a horde of sellers appear in both numbers and volume to ensure the price stays in the ~18c/18.5c range. Well controlled indeed.
Like others I am also perplexed at the SP given the resounding positivity of ED. Again, it feeds into what I am seeing per the controlled price action as evidenced above. But fundamentally for STX to have lost ~$800m in MC due to the fail to flow for SE2/3 and then not regained some due to our many subsequent successes / positive announcements (which we have listed many times ad nauseum, greatest of which is ED), has me stumped tbh. Yes STX downgraded 317PJ of 2P/2C at South Erregulla and that was a real kick (I lost 7 figures), but the potential discovery of 50% of 278PJ 2U at ED is not insignificant in any way. More importantly is that this drill opens up the prospectivity of our 100% owned Arrino & Kadathinni prospects. The Dandaragan Trough gas kitchen of which STX has THE best acreage (IMO) has not been appropriately reflected in the SP in any way. Should be well into 30c+ IMO. Yes ofc this creates a great buying opp. and FWIW I pulled the trigger and doubled down at 17c 2 weeks ago... (didn't sell the house to do it though haha)... I felt the bottom was in and I back my analysis and conviction... not withstanding all these games being played by greater powers, frustrating as it is.
Lastly, been some interesting rumours circling re MIN and it's gas intentions. My take, MIN is more than likely to to a deal with Mistui. It makes sense for many reasons. Mistui (& BPT) need more gas for Waitsia. MIN want to develop LD quickly but unlikely to be in a position to fund a $1bn+ capex GP build. But $1.5b for 50%, wowee that's some big numbers right there. ATM no one really knows the reserves for Greater Lockyer field... some say 550PJ... probably more IMO. When I was in NWE and LD-1 hit jackpot there was talk the field could be up to 2.5TCF, possibly more. 6 holes later apparently MIN has the most gas (and oil) in the PB. It;s probably closer to 800PJ than 500PJ but remember this.... NWE's TO valued the LD discovery @ $2.5b... from 1 well, Crazy!!
But lets for fun assume $1.5b was achieved for 50% of MIN's LD gas (possibly excluding oil/condensate which could have a $1b IGV IMO)... that would change EVERYTHING in the PB. Remember WGO went for about $2 GJ multiple. MIN's purported Mistui deal would be metrics of ~2.5x WGO transaction i.e ~$5 GJ. Is this out of the question? Arguably not. Remember spot price has risen significantly since WGO TO. Then it was ~$5 GJ.. .now it's in the $9-$10 range. And remember this graph re the AWE TO metrics when spot was ~$3.71 GJ... about a 143% increase in spot prices to 2024 numbers.
And remember this is all before anyone in the PB could dream of accessing LNG export pricing. We are talking $20+GJ pricing for gas which costs circa $1GJ to produce... and given the latest domgas policy updates, sounds like the govt is opening the doors to the likes of MIN, Hancock & STX to export if the domgas market is "looked after".
Hypothetically if we were to apply similar metrics to STX's current 397PJ 2P/2C would give you a 69c SP val. @ $4 GJ would be 55c. @ $3 = 42c. Very rudimental calcs but I'm sure you get my drift. Don't sell on the cheap.
Cheers,
brobel
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