From my read of the announcements since commencement of the WE drill, the Company seems very happy with progress to date.
I've been surprised by the commentary on HC since the 1 August announcement. What read like a straightforward positive announcement has been turned inside out and upside down? As a shareholder, I'm pleased that drilling progress to date appears to be validating the pre-drill assumptions.
The apparent conjecture on HC is a reminder that knowing why you are investing is even more important than DYOR. It may be industry thematics, management, event trading, technical trading, make-up of the Top 20, whatever...If you are clear on the why then forums like HC may provide additional context, meaningful engagement or an opportunity for some fun and banter. I've never seen so many rockets and launches in one week. A bit of laugh and timely seeing it is the 50th anniversary of ''one small step.."
STX has been one of my longer stock holds. For me the industry thematics (gas supply challenges) have always been strong and I've generally been happy with the Board and management. At the very least I consider their efforts have been well intentioned. Subsequent to the April 2017 changes I feel the stars have really lined up between thematics, opportunity, capability and execution. It doesn't guarantee success, however, I've never felt more confident in the potential of the Company.
While there is the obvious focus on the next few weeks (probably more like 4-6 weeks if potential flow testing is included) I'm hoping, if WE is successful, the CEO/Board have the appetite to take the Company to the next level. The price of WGO will give an easy look-through to the stand-alone value of WE. The next leg-up of value for those taking a longer investment horizon is whether progress and efficient new spend on UIL leases and the Southern Cooper (Jaws ++) can materially impact on value in a short-medium time frame. IMO, these are the unknowns that hold the promise for those hoping that an event success at WE (if commercial) is simply a new baseline for future exciting times ahead.
Mir, you may have a view on this. Be great to hear if you've picked up in any discussions with management whether the appetite is there to invest additional $$'s, extend the runway and go for it. Btw was really disappointed to see the cynical post about you having a line to management. The criticism was infantile and appeared motivated by ego (or hurt ego). You have been very generous in sharing commentary from the WE site visit and other objective comments. Hope this continues...
Back to the future Company potential, to put things into some perspective it's interesting to compare the market capitalisation (mc) of a few industry players:
Strike ~$200m
Senex ~$500m
Cooper ~$950m
Beach ~$4.75B
Origin ~$14.0B
Santos ~$14.7B
Woodside ~$32.4B
So for those wanting/hoping for a +$1/share investment outcome, STX with 1.5B shares needs to get itself well above Cooper and onwards towards Beach.
You need a high value portfolio of opportunities (quality + materiality), good execution, good governance and good luck to make the climb up from the current $200m mc to a +$1.5B mc. That's an 8x multiple.
What continues to excite me about the Company and gives a pathway to the ambitions above is how they have positioned themselves into two Company making opportunities in the Perth Basin and the Cooper. Success at either will have real materiality. Success at both -boom!!
In both plays they are looking to turn conventional technical wisdom on its head. The industry still seems negative-lukewarm on the Southern Cooper (CSG at ~2kms deep) and it's only in recent times that STX's technical assessments at WE and beyond (UIL leases) are being given more credence. It's clear with the Cooper that there are deep domestic/export gas markets for PEL96 in the success case. I'm not as clear whether the Perth Basin could actually be a genuine multi-TCF backfill option for the NWS or whether it's limited to domestic supply. I recall rick23 put up a chart the other day on the latter. The backfill opportunity could be the 'sleeper' that could justify a whole re-rating of the Perth Basin's significance. Really interested in thoughts/comments on this and the potential NWS future demand?? Maybe it simply comes down to cost of supply - which supply source is cheaper wins. See potential huge value upside for WE/UIL if the current drilling is successful.
As an aside, so good to see return of hardcash and tui....
GLTA over the next 4-6 weeks at WE. Of course this is important and the nearest event for a positive SP re-rating. Potentially so much more could follow.
Cheers
Adaltiora
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