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20.5¢ strike energy limited

Ann: Exploration Update, page-42

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ellj13

104 Posts.

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21/04/24

10:16

Post #: 73442463
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Originally posted by Justadabble: ↑

That's not quite right. There is plenty that we know.

We know that WES paid $5M for an option on STX's share of WE gas.
We know that option was exercised in August 2020
We know that the GSA was at a fixed price.
We know that the GSA includes a provision for annual escalation
We know that STX's obligation is for 25 Tj/day for approximately 11 years.
We know what the prevailing WA domgas price was at the time of execution
We know that the GSA is subject to FID, but no other preconditions were announced publicly

Given the above, the terms appear favourable to WES so in the event that they hold a right to terminate the GSA, them exercising such a right seems improbable.
Given the above, in the unlikely event that STX held a right to terminate the GSA, they would most likely have done so already, and paid the $5M back to WES.

The existence of the GSA, and the timing of the GSA, is circumstantial evidence that supports the various research analyst's applying a discount to Hancock's price for WGO when valuing STX's stake in WE.

Expand

In terms of 'annual escalation', do you believe the rate of escalation would be fixed %, cpi, gas price % on base or other?

Or do you recall date of relevant announcement so I can trall through?
Thanks.

STX Price at posting: 21.5¢ Sentiment: Buy Disclosure: Held
3 Upvote

0 Great analysis

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