Another few good reasons not to accept the BPT offer from Barrenjoey

Barrenjoey

Energy

Onshore Perth Basin – the next gas boom?

Our deep dive into the onshore Perth Basin exploration history and geology, highlights the likelihood for material reserves growth over the next 12 months. Subsequently, significant value could also be created through LNG ullage. We extend our coverage to initiate on Strike Energy (STX: OW, $0.46/shr PT) and Norwest Energy (NWE: N, $0.05/shr PT). We also revise our BPT PT to $2.24/shr (from $2.03/shr) and maintain our OW rating.

Perth Basin – world-class gas resource amid a global gas shortage

The discovery of Waitsia by AWE in 2014 hasreset perceptions of a mature basin; unearthing a new deeper gas play which hasachieved 100% exploration success since, and now discovered ~3.5-5tcf of gas.The low development cost of conventional Perth Basin gas (~A$3/GJ) iscompelling, as too is the opportunity to access record LNG prices through NWSullage (spare capacity). We estimate NPV value of A$0.25- 1.0/GJ (domgas-LNG),implying value upside to: BPT, STX, and NWE. The play is entering a catalystrich 12 months: Waitsia is going into first production; material resourceupgrades are expected, and there is proposed consolidation; which parallels theexperiences of Queensland CSM in the 2000s