@gimo211 I was just about to post the same numbers that you posted on the other thread, thought it best to bring across to this thread so others can see the significance of these numbers (your snippet copied below):
"Following the subline, the uncontracted gas (126 PJ 2P reserve) is valued at $6/GJ in the free cash flow model, which represents $756m in value. If Strike is granted an exemption from the WA domgas policy (WA gas export ban) and can sell this amount of gas through the LNG export capacities, the uncontracted gas can be valued 10 times of that:
126 PJ 2P reserve at $63/GJ =>$7.938bn!!!
Theuncontracted gasis a major additional value driver for Strike!!!"
Incredible numbers aren't they. It not only demonstrates how valuable the uncontracted gas is but also how significant the catalyst of being granted LNG export approval would be for STX (and other PB players of course). Even at a more conservative $40/GJ LNG netback price, the value for the uncontracted gas is ~$5bn. That amount of gas could realistically be delivered over a 10yr timeframe for an additional ~$500m p.a. c/f to STX (or $794m p.a. if LNG remained at $63/GJ). I wonder what Macquarie's S.O.T.P. / DCF valuation would spit out with those inputs. Plus - you can factor in additional reserves being defined over the coming years (SE, Ocean Hill etc.) which would likely be allocated to export as STX would have already met their 15% domgas sales requirements to the likes of Perth Energy and WES. As an aside, just think what BPT's revenues & FCF will look later next year when they start exporting LNG thru NWS. It won't take them very long to build up a war-chest for any M&A activity which they have clearly put on the table.
It is inevitable (IMO) that the WA govt announces a whole of industry LNG export approval process. WA have the NWS KGP as the perfect asset to help supply the world with energy security. We know as fact that the NWS will soon need 1,000TJ a day of gas supply by 2030. That's a lot of gas, much more than Waitisa stage 2 can supply. It would benefit no one to have that much LNG capacity sitting idle. The NWS JV don't want that. And we know the WA govt and Fed govt will benefit immensely from exporting LNG (QLD alone is enjoying ~$1bn+ p.a. in royalties from their CSG O&G exports).
Here are 2 charts I've seen recently re LNG demand / supply forecasts. One from Credit Suisse, another from Santos. Clearly the demand from our main LNG customers (Asia / Japan) is forecast to keep growing... who will likely fill the gap? I can't see it coming from the US or Mexico.
My other takeaway from today was wrt Haber. STX have been relatively conservative with their assumption for Urea price @ US$500/t. Below are the recent USD prices of urea, we saw recent highs of $925/t which would equate to $925m p.a to STX based on a retained 50% equity stake. Every US$10 increase in Urea equals +$20m p.a c/f. You can see why any potential project investor would be interested based on those economics.
Month
Price
Change
1
Jan 2022
846.38
-
2
Feb 2022
744.17
-12.08%
3
Mar 2022
872.50
17.24%
4
Apr 2022
925.00
6.02%
5
May 2022
707.50
-23.51%
6
Jun 2022
690.00
-2.47%
The other significant theme I took from today's IR preso was STX is at pains to highlight the value gap b/w their current SP/MC and relative valuations. A few points today was clearly to address this and perhaps to address all the takeover talk out there. The chart below speaks volumes. It shows you how materially significant the market has moved in terms of gas prices and implied multiples. IMO AWE went too cheap... but that is before any inkling of LNG export and significant downstream value adding processes was on the drawing board. So much has changed in 3-5 years.
Plenty of catalysts to look forward to for the rest of this year and next and I like how clearly they are articulating this. SE2 and SE3 scheduled for 1H 23 will be a game changer (for then feeding into reserves certification)... and Ocean Hill is an absolute sleeper.
GLTA
STX Price at posting:
27.5¢ Sentiment: Buy Disclosure: Held
(20min delay)