Absolutely, BPT should be seriously considered as a contender for starting or even leading consolidation in the Perth Basin.
In many ways, it does make a lot of sense. BPT recently took a hit to their Cooper Basin gas reserves, SP was sold off heavily IIRC. I can see BPT pivoting and allocating more capital to the PB projects as this is now clearly a better high growth and long life asset.
Although at first glance BPT's balance sheet may not look as strong as others, they are generating good free cashflow (ramping up from FY24) and have comparably low debt gearing (below 10%). I also agree that if a play was to happen it would be with BPT in a consortium with Mitsui as they are already partners with a "strong working relationship" and Mitsui has much deeper pockets to help fund any acquisition plays.
Also, don't underestimate the connections / power of Kerry Stokes thru BPT. Just look what he did with the "special exemption" that he negotiated last year for Waitsia to backfill NWS LNG. Kerry would love to further strengthen his interests & wealth in his home state.
The more I have been thinking, I believe the fact the PB is looking more and more likely to be a 10-20+TCF gas basin, the more likely the majors will want to consolidate the smaller players and position themselves for the next 20-30 years of gas / LNG growth. Think of the PB as the next NWS which began 35 yrs ago... just now it's on-shore with substantially far less capital costs required to develop. Very attractive ROI.
So IMO, the NWS LNG is where all the action is going to be driven from and to some degree aided / at the mercy of WA govt policy. Looking at that PB acreage map above, you can see the significance of NWE's acreage with not only NWE's LD-1 but more importantly the many large leads that are dotted across NWE's 2 permits. NWE clearly has very strategic land holding and, time will tell, but a lot more TCFs are likely to be discovered here.
Back to the NWS, with the NWS off-shore gas fields depleting, predicting to rapidly decline from 2024... the Karratha LNG plant will begin to transition to a tolling model, starting by taking in 3rd party gas (ala BPT's Waitsia). So I have been postulating... with Chevron seeking to sell their 1/6th stake and WPL rumoured to buy it... and with BHP offloading it's O&G assets + it's 1/6th NWS share to WPL... well I don't think WPL will be keen to own 50% of the NWS LNG. Too much capital / risk.
So... I believe it is quite likely a large infrastructure fund (perhaps the likes of Macquarie) would be a logical buyer of the physical NWS plant / pipelines / processing assets etc., allowing the likes of WPL to free up significant capital (~USD$5bn+) and use these funds to consolidate on-shore PB gas assets. Just a thought...
FWIW I just noticed in WPL's quarterly released today that their Wheatstone gas reserves were significantly downgraded...
On the positive, WPL's LNG cargoes are forecast to rake in huge free cash, with the LNG linked POO tracking higher ($100 target?) and LNG cargoes selling much higher (remember the USD$250m LNG cargo sold @ $US50 per million BTU last month!). WPL have sold 17% of total LNG deliveries as spot this year, enjoying the $$$ coming in.
Makes me think WPL would be keen to take the current cashcow windfall and lock in multi-TCF gas reserves for their future LT projects - i.e onshore PB gas. Now's the time.
Actually, add Santos to the mix... who currently supply 17% of WA's domestic gas needs from it's offshore WA Reindeer field... which is unexpectedly ceasing supply much earlier. So add STO to the list of prospective players jostling for gas in the PB - IMO.
FWIW may be blind-sided by some foreign interest (just not from China)... but I am not sure what the current FIRB rules are...
So yes, lots of combinations and permutations to consider... and NWE are well placed to be a part of this, but perhaps for only a short period if they are likely swallowed up by MIN.
Hopefully the above gets some of you thinking... while we wait for news that LD-1 is officially completed.
GLTA
