I had some time on the weekend, so revisited the export model....

I had some time on the weekend, so revisited the export model. Based on the domestic contract volumes of 25TJ/d for WE and SE, and 24TJ/d for Walyering, we will have a total domestic daily production of 74TJ/d when SE and WE come online...




Based on the netback price assumption of 15/GJ, this gives a fair value of 66cps for STX assuming a 50% dom gas reservation. However, as you can see from the model, the maximum available volume for export is only 40TJ/d assuming (1) SE standalone development proceeds at 40TJ/d, WE at 100TJ/d and Walyering at 37TJ/d (once DBP interconnector is up and running by FY25).

I've also modelled the scenario where OH appraisal is successful and a 50TJ/d plant is developed. In a scenario where dom gas reservation is 50%, we will be able to sell almost all of the OH gas to the export market. In that scenario, OH cashflow will add 22cps to the DCF valuation.



The above is just a ballpark guide as I haven't factored in all the different capex requirements but it is enough to provide a general guide as to what a dom gas policy change will be worth to STX, and what OH is worth in that scenario.

Hope that helps.

Disclaimer: I hold STX. This is only for general information sharing and NOT financial advise. Please go your own research and consult your financial planner before making any decision.

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