Well this makes things interesting.I was always of the opinion...

Well this makes things interesting.

I was always of the opinion that corporate activity in the PB was inevitable. It made sense for WGO and STX to merge and now that STX made the move on WGO, it has clearly forced BPT's hand.

Initially, I am surprised that BPT would go for the non-operated party. From what I know they like to be the ones in control. But, perhaps it is the start of further M&A action... Like others, I am of the opinion that STX is in someone's sights as well.. perhaps a known partner to BPT... such as Mitsui. BPT and Mitsui have always been the likely consolidators in the Perth Basin... Unless STO or WDS want to crash the party... Backfill for the NWS is still a significant strategic imperative. If anything, Origin's M&A action is indicative of the value that overseas O&G companies / Pvt Equity see in our gas / LNG assets. It was always going to filter down to the smaller players in the market. Just a shame that it is likely to fall into foreign ownership.

Clouding this WGO play is BPT's access to LNG export. Yes, we know it has only been given for Waitsia but I would not be surprised to see further exemptions granted for such a large pool of gas that is shaping up in the PB.

I also had the feeling that STX has been purposefully quite aggressive in messaging to the market how much 2P / 2C gas resources they have, biggest in the PB. That and last week's announcement regarding multiple significant leads east of South Errugulla. To me it read as if STX knew bigger fish were circling and they wanted to get the message to the market that the SP is materially undervalued.

BPT have a very strong balance sheet and can outbid STX - that's a given. Perhaps STX will increase their scrip offer to 1:1... would be ironic if it ended up back at 1.2:1 to seal the deal.

Personally, I was hoping STX would merge with WGO, make it to first gas revenue with Walyering, FID with Haber and to sink a couple more holes in South Errugulla, perhaps becoming a $1bn+ MC, before a predator came knocking. Not to be I think.

Interesting to see how this plays out.

GLTA