It wasn't a cash bid block. It was a work program only bid,...

It wasn't a cash bid block. It was a work program only bid, which is why they got it for nil consideration. The catch is that you have to supply the domestic market within 2 years.

May be a case of "the buyer's curse" though - that block is completely stranded for SXY and from the domestic market - the only infrastructure around it is hooked up to Gladstone. They will have to build a GPF and a long pipeline to get it to Wallumbilla in two years. That destroys most of the value of the block compared to it being a bolt-on acquisition to Woleebee Creek where the infrastructure already exists.

QGC should have won this if they wanted to bid, because they have all the infrastructure right next door. The fact they didn't win it suggests they didn't bid. Probably because they knew they couldn't get it to market in two years for an acceptable return.

I also think SXY might have overestimated the reserves in that block. It's right on the edge of the permeability fairway, they have assumed the whole lot is developable but the distribution of existing development wells around it (as shown on the map) suggests only about half the block actually has permeability.

Still, it's a good pickup for SXY as long as they government doesn't ping them if they don't manage what they promised. It will be interesting to see what effect this has on the WSGP because it will cost several hundred million dollars to develop this block and I doubt SXY has the capacity to do both simultaneously. This one needs to be done within 2 years so that would suggest WSGP will have to wait.