If the acreage is an analogue of AUT's Longhorn/Sugarloaf...

If the acreage is an analogue of AUT's Longhorn/Sugarloaf acreage, brokers have suggested NPV10 of circa $10mm/well, which translates into circa $780mm for STX's 6,260 net acres with the potential of very considerable upside.

There is a lot of discussion on the TXN board about a potential land deal. It has a comparable land interest in terms of acres in McMullen county and it appears to be in a comparable part of the EFS trend. TXN has drilled 4 wells - awaiting fracc of the last. Eagle Landing may have to consider drilling similarly before it could contemplate a land sale - TXN would need to allocate at least $10mm for that, I would have thought.

If TXN does a land deal, there will be a yardstick against which STX might be compared. Full field development would require a lot of cash. That would require a capital issue, a farmout or a sale of part of the land.

I'd go with 75c subject to seeing the out turn for TXN if it does proceed with a land deal.