Hi JD
It's all IMHO obviously, but here goes:
The finance package approved by Mac Bank in December 2022 assumed STX would find lots of gas at SE 2 and 3, which unfortunately did not happen.
That means the $80M unapproved facility is likely to never be approved. I just think of it as a phantom facility that evaporated in February 2024 when the SE 3 results were released.
There has not been any announcement about the $40M tranche short term facility which still has not been drawn down and they only have until 30 June to do so, unless renegotiated.
STX needs to move as quickly as possible to develop SE1, but I expect they do not have enough available funds to pay for it because STX must maintain minimum liquidity levels (ie real cash held on deposit which cannot be spent) to satisfy Mac Bank while there are still credit facilties in place.
It is tempting to say that STX can simply delay developing SE1 until Wailyering delivers more cash, but I expect Gina will be playing hard ball on trying to accelerate WE as much as possible, which will require STX to raise hundreds of millions in debt and equity, unless they sell down, which means they will probably lose operatorship.
And Gina will be fully aware of the possibility of unitsation for SE1 and she can play that card hard now since I doubt the WA Gov would approve SE1 to be developed as a stand alone project when STX is arguing that WE should be built as big as possible to allow export sales of LNG.
It's always good to hear from major egos who have SN on speed dial, but this is a funding question that ultimately can only be anwered by Mac Bank, not SN or the STX BOD.
In conclusion, I don't think STX's true financial position is particularly strong.
The simple solution is that Mac Bank insists that a CR is done and I'm tipping it will be done by the end of September.
Cheers
ft
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