Ann: 2Q FY24 Quarterly Report & Appendix 5B, page-295

It seems many people need a lesson or two. So JOA 101 in exclusive operations (sole risk in the vernacular).

Minimum work obligations are the obligations of all JV partners and if partners don’t pay up they will lose their participating interest usually on a withering basis (in almost all modern JOAs) linked to the level of failure to pay. The partners will also usually lose their votes under the JOA and the right to attend operating committee meetings until they pay up. That’s totally different from
sole risk operations.

To those who carp and criticise, please do me the courtesy of reading what I said. I didn’t say anyone could suck out all or most of the gas. What I said was way more nuanced than that.

If STX refuse to play with building a JV processing plant and processing the output of existing wells Hancock could sole risk one or more wells, process the output itself and sell it. JOAs normally prescribe the limit of that extraction but if it was silent they could take up to 50% of the reserves. At the very least the JOA will allow them to make a very decent return on a sole risked well. That’s why people sole risk things.

Of course there would be nothing except lack of cash to stop Strike going along with Hancock in new wells or processing plant. If they had enough cash, that is.