I am afraid that ftroop is much closer to the mark than you. There is nothing to stop Hancock threatening to sole risk wells on WE and forcing STX’s hand. plus Hancock could press ahead with a WE located processing plant inviting STX to fund its 50%.
On the gas processing, STX could not raise the sums required via an equity raise at today’s prices. It would be painfully dilutive. If they needed say $250m it would be more than a third of the market cap plus whatever discount was required to get such an issue away. They can only use 15% of their equity without shareholder approval. 15% is some $105m.
Those who know anything about RBL will know that STX would have to maintain a significant cash float and that it is improbable that any bank would fund the loan without having full security on STX assets which of course Macquarie might have a view on! That view might be repayment in full first! Plus the cash flows for RBL would be adversely impacted by the low price on the CSBP 100pj. We know it’s not market and likely was sub market even when the option was granted. Why else would they pay STX $5m much needed dollars?
I have said previously that the only way STX could have pulled off an affordable RBL deal was jointly with Warrego before the Hancock takeover. It simply does not have the reserves base to make the borrowing possible on its own. Hancock does not need to borrow.
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