Thanks for your kind words Tui. I try to constructively...

Thanks for your kind words Tui. I try to constructively contribute to these threads when I can, although I must say sometimes when discussions get hijacked I tune out for mental health reasons!

I do agree with you - STX has all the makings of a multi bn $ coy. My real concern is at this current juncture they are ripe for a takeover. This would be of great disappointment as I was personally hoping to let go of my STX shares when they hit at least $1!

IMO the recent subdued NSAI reserves statement has opened the possibility of a lowball hostile offer.

Looking at historic transaction multiples for O&G companies, they vary from 1 up to 4 times EV/2P (see graph below). Bearing in mind that the 3-4 multiple was seen during the crazy CSG LNG boom years. Current multiples seem to sit at around 1 times (reference to SXY's bid from POSCO - SXY has 2P of 767PJ).

Before anyone jumps in, yes this is for CSG O&G coy's (I couldn't find one for conventional O&G coy's), but from what I know conventional gas coy's like STX would attract a slightly higher multiple due to being less capital intensive:

• no expensive and environmentally unpopular fracking required
• don't need thousands of wells to access the gas (there are more than 40,000+ CSG wells in Aus!)
• doesn't generate copious amounts of dirty water (can average 10,000 litres of water per day per CSG well in Queensland).
• don't need to access / acquire acres of land to be able to drill the thousands of wells

So based on current multiples STX with 150PJ 2P can be afforded a valuation of $150m-$200m on WE alone. But what value would you ascribe to other leads in EP469, Walyering, SE (1.6TCF?), Project Haber and Geothermal (huge ESG credentials). I would like to think another 10c-15c p/s, but with current sentiment we may be sitting at a sub 20c SP until the next catalyst. Unless that catalyst is an M&A approach.

If STX can re-rate WE NSAI reserves to the achievable 800PJ per STX's SN conf. call post reserve release (400PJ net to STX), then we at least have the foundations for a much stronger SP. However this may take 6-12 months to achieve (i.e. recomplete & test WE-3, WE-5 and Natta 3D). As SN said “These initial reserves are the beginning of a value staircase with a clear plan to increase the recoverable resources in the Erregulla complex and come at a time when gas availability is shortening and its value in the energy system is rising."

The ace up the sleeve could be SE-1. If this is a success in early 2022 and can indicatively justify the 2C estimate of 1.6TCF then that will be the ultimate re-rate. STX would then move to complete 3D over SE (currently only 2D) and drill the 2nd proposed well, SE-2. If STX can bank some 2P reserves from SE that will build the case for a much, much higher valuation. Just for fun... if STX was able to book 2P reserves of 2000PJ (i.e. 400PJ from WE and 1600PJ from SE) then there is your $1 SP!

Circling back to BPT and an opportunistic TO... I believe BPT will know that STX are vulnerable and IMO it would make sense for BPT to make a play before STX go about trying to increase the NSAI reserves and/or drill SE-1. BPT could, IMO, make a reasonably low ball offer knowing they themselves would be able to complete what is required to enjoy the uplift from 300PJ to 800PJ - all for what I would regard as quite a low risk scenario. Don't forget BPT have a lot of knowledge on the PB especially the data from numerous producing wells and 3D seismic. Also I believe BPT may want to take out STX and/or WGO as a defense mechanism as they themselves could be prey of a possible takeover - again all my speculation.

Lastly, the ESG credentials is another big factor to drive interest in STX IMO. Most brokers and investors agree that ESG factors are at least partly to blame for the dislocation between stock prices and commodity prices. So STX have proactively addressed this and IMO are garnering great support from industry, government (federal and state) and investors alike. It will also help facilitate STX's access to capital, at more competitive rates. There are something like 30 hydrogen projects being planned in WA alone and these green and/or blue hydrogen projects will be a logical feed into STX's Project Haber, all being supported due to the overarching drive for net zero 2050.

So IMO lots to look forward to in the coming months. I maintain my belief in STX and their ability to execute on their aggressive strategy. Most importantly, I look forward to reaping the rewards.

hagwe