Ok a new thread with a cryptic title. This one is for everything...

Ok a new thread with a cryptic title.
This one is for everything Takeover related, either us or Warrego.

The title is to do with the Scarborough Basin Project that Woodside have delayed the Funding Investment Decision on again. We can (and probably will) ponder why on this thread.

There is possibly more than one reason for their delay. Firstly Wood McKenzie put a doubt on the economics of the project.
From this article ....
https://www.boilingcold.com.au/woodsides-scarborough-lng-was-uneconomic-before-price-crash-woodmac/
"The Wood Mackenzie analysis assumed gas companies required a 12% annual return from an integrated LNG project. This is the same rate that Woodside told its investors in November 2019 was a typical hurdle the company used to screen investments.
Woodside could supply LNG for less than the uncompetitive $US9.30 a mmBtu price by accepting a lower return on its investment. However, it is unlikely that BHP, Woodside’s 25% partner in Scarborough, would accept such a cut as it has many more investment options than its smaller and less diversified partner."

By Woodside again delaying the FID for Scarborough, I'm wondering if they are waiting for us to drill South Eregulla and prove up the Perth Basin fairway theory before making a decision on Scarborough. Gas from the Perth Basin could allow Woodside to put off Scarborough for another 5-10 years if we can prove up a few Tcf.

With Scarborough requiring an investment of $11B, then the Perth Basin would seem a much cheaper alternative, no matter how much they paid for Strike. The $US9.30/mmBtu seems a high price compared to what Perth Basin gas would cost to get to the NWS, with the pipeline already existing.

I've been thinking that a T/O of Strike would be extremely difficult because it is so tightly held in the top 20, but obviously with enough incentive those shares could be shaken loose. If SE is as great a success as we all hope, then the SP could be expected to be multiples of present price, well over $1 IMHO.

Thoughts??