Analyst price targets, page-125

Howdy all,

Been a few months since my last post, but still very much engaged in the world of STX. The forum has been a bit hit & miss lately... kudos to the usual suspects for providing good analysis and commentary, shout out to @618 your modelling is always appreciated.

Some here may not realise it's almost 10 years to the day since the first deep Kingia gas discovery was made in the Perth Basin. Sep 2014 was when AWE was "lucky" enough to stumble on their ground-breaking discovery, which we now know as Watsia. And this is no joke, as back then the primary objective was the Dongara-Wagina sands, with the secondary target being Kingia/HC sands. And only because the Scenicio-3 drill bit was in good condition, WIP was under budget and of course they had some pretty strong gas shows, that AWE rolled the dice and decided to keep drilling deeper - and subsequently hit the Kingia HC jackpot.

Mind you it wasn't a spectacular flow from this well, only 12.3 mmscf/d. But the subsequent appraisal wells was game-changing, Watsia-1 25.7 mmscf/d, Watsia-2 38.5mmscf/d, Watsia-3 49.5mmscf/d and the big daddy Watsia-4 89.6 mmscf/d.

Prior to Watsia discovery, about 120 exploration wells had been sunk in the PB with only 13 commercial discoveries, so a pretty low 10% success rate. The oil & gas game has always been high risk, high reward. But look what has been achieved in the space of 10 years. Better seismic, better interpretations, better drilling techniques... a lot of work & passion has gone into the PB by a number of companies... and IMO STX has been at the forefront of this exploration. Not all has been a success (ala SE 2 & 3) but in the scheme of things, more success than failures.

So for me, right now, I am sitting back waiting for the next few catalysts to fall. Yes, Walyering 7 will be interesting to see the flow test results and reserves update but IMO it's the currently drilling ED-1 well which has me the most excited. IIRC it's GCoS is ~44%... which is not too bad. Could have been better if the Natta 3D had been completed as proposed back in 2021 but wasn't to be, not sure why, maybe EPA? As an aside, MIN's Lockyer Deep-1 was a 38% GCoS and that hit the Kingia jackpot... flowed 130mmscf/d on test too.

And worth noting ED-1 is not too far from the old WAPET Erregulla 1 (1966) and Erregulla 2 (1980) which did not hit commercial gas or oil. But bear in mind both those wells were targeting the Dongara-Wagina sands... and finished TD about 4km deep, from memory, ~1km short of the now known KHC play.

Also what peaks my interest is the theory put out there by WGO back in 2021 (WGO guys did actually do some good things), and it was backed up by STX mgt, that the gas generated from the Dandaragan Trough (otherwise known as the gas kitchen) has migrated north and likely filled the structures in our EP469 before spilling to the north and west towards Lockyer Deep and Waitsia (see image below).

I have always wondered if this theory is indeed the case and we are about to find out. Obvious risks are with faulting / structures (like encountered at SE) but if this theory is proved correct then prospectivity of the western edges of the permit (i.e. 272PJ 2U for S/W Errugualla-1) increase significantly. That drill I also eagerly await.




So I personally do hold some high hopes for ED-1. It could be a real game changer for STX, particularly if the WA domgas review lands in our favour. I say this b/c with ED-1's 278PJ best estimate 2U, a discovery could then quickly be appraised and potentially tied-in to the mooted gas plant on our precinct and potentially ear marked for export thru the NWS. I would also not rule out potentially finding commercial oil... high quality lighter oil was found at Erregulla 1 & 2... and MIN recently made a significant oil discovery just north of ED-1 at their NED-1 well... 47m oil column... a likely multi-million bbls of oil is the word. So IMO, the upside @ ED-1 is significant, with minimal downside given our current valuation. Plus a discovery here will make corporate action even more likely... mind you IMO I think it has already started... it will just be brought forward, that's all.

40 days estimated to TD for ED-1... spudded on June 27th... I am eagerly awaiting what will most likely be a welcome trading halt... maybe we can make these shorters sweat a little... and it's about time we are due some luck our way...

Cheers & GLTA

Brobel