Many good comments re the potential of the Perth Basin from today's exploration update but don't forget the Street Talk article in January from the AFR.Interesting timing of the update considering the Mid-Feb potential of a gas supply deal...somethings got to give here I feel.
Street Talk M&A dominoes from potential Waitsia, North West Shelf gas dealSarah Thompson, Anthony Macdonald and Tim BoydUpdated Jan 20, 2020 The pieces of a Western Australian gas deal are slowly falling into place.Woodside is the operator of the North West Shelf. And at the centre of the proverbial storm is the Waitsia Gas Project, a partnership between Japan's Mitsui and ASX-listed Beach Energy.Street Talk understands a gas supply deal between Waitsia and the North West Shelf – which accounts for more than one-third of Australia's oil and gas production – has landed on the radar of every Perth Basin energy player, and the anticipation is at fever pitch.While we're not suggesting an agreement has been inked,market sources on Monday pointed to an announcement on a deal being released as early as mid-February.Such a deal would see Waitsia supply gas from the Perth Basin to the North West Shelf, which would then be shipped overseas as LNG.Observers suggest the fact Waitsia has sold little or no gas into the domestic market is a sign that it is holding all its capacity for a monster deal with the North West Shelf.If a deal did transpire it could hit domestic gas prices, as the market seems to have pegged Waitsia gas to be sold locally rather than internationally. This could lead to a re-rating of players in the Perth Basin, especially those with volumes that supply Pilbara-based LNG producers.
The knock-on effect would be that any company looking to make an acquisition in the region – Beach Energy is an obvious consolidator – would have to get a wriggle on if they want to make a play prior to any re-rating.The likes of Strike Energy and Warrego Energy, which are sitting on around 1 trillion cubic feet of gas after the West Erregulla discovery in the third quarter of 2019, are the obvious targets.Strike, which is worth $307 million on the ASX, has wholly owned exploration acreage to the south-east of West Erregulla, which is seen as a possible extension of the Waitsia play.
(*Interesting that an exploration update from STX management was released today in Mid - Feb !!! coincidental ??? I think STX Management are all over this, behind the scenes and we hold the box seat in terms of quality acreage that is now beginning to be revealed in reports such as today's announcement - my opinion only.)
Warrego, which has a market value of $135 million, would be the cheaper option.The North West Shelf is a joint venture between Woodside, BHP, BP, Chevron, Japan Australia LNG and Shell, which all have a 16.67 per cent interest in it. The $33.5 billion Woodside is the operator of the project.The North West Shelf has been operating for 35 years, has shipped more than 5000 LNG cargoes since 1989 and has had $34 billion invested in it, according to its website."My moneys on STX management putting shareholders into the box seat with the Perth Basin...I don't think it's going to be easy though as there are several predators lurking in the background.
(20min delay)