As I see it, so far, it's a mixed report card for Tom. I'm glad...

As I see it, so far, it's a mixed report card for Tom.

I'm glad that he has recognised the big opportunity now is to commercialise Rafael Deep in stages by focusing on the domestic market opportunities first in the NW of Australia where first-mover advantages are to be had. Taking advantage of the region's remoteness by moving into downstream oil & gas is the way to go. The opportunity to create a virtual monopoly in regional niche markets below a critical price point for refined oil products and densified gas products (e.g. CNG, LPG & LNG) with which importers can't compete, is too good to miss. It will however require considerable capital investment, but one that should generate regular cash flow, high margins and IRR because of the virtual market monopoly that could be had. This would present an attractive project funding opportunity.

I'm also glad that Tom has expressed the need to focus on development as opposed to exploration for its own sake, now there is a project of sufficient size to act as a flywheel. In subsequent development stages, beyond that currently envisaged - when Rafael and analogues reach and exceed 1Tcf say - then markets further afield will need to be considered. Depending on size this could still be in Australasia. Australia is strategically in a dreadful position with insufficient refining capacity to withstand conflict from those clearly threatening our future. At the likely larger stage 2 or 3 project, perhaps the USA or European petroleum industry capital markets will need to be tapped, where they have not been overawed by anti-petroleum industry wokeism. A pathway like that of Woodside, Oil Search or Santos potentially awaits. However, a lot will have to go right.

I am also glad Tom has seen the need to prioritise where resources are dedicated and that that should be focussing on developing the petroleum industry opportunities in the NW of WA where there is the unusual opportunity to dominate a regional market and raise barriers to entry for those less well endowed.

If the rumours are correct, I am glad too that Tom has apparently realised the error in selecting Sabre Who as partners and rapidly developed or activated reserve plans for an alternative funding pathway to get Rafael Shallow drilled this year no matter what - even if that means sole risking - something I had posted about repeatedly. If it is the case that Sabre haven't been able to come up with the funds on time, then this would be a black mark on Tom's judgement by selecting them. One hopes it wasn't just because ex colleagues were apparently involved. If they are all he could dredge up, then he would have been better taking some shareholders' advice to sole risk the drilling of Rafael shallow & Ungani Nth on a limited fund raising which could have been done then at 12c not 6c as seems likely next week.

Tom's focus has already led to offloading non-core assets that I suspect were disposed of a little too lightly and possibly too readily. By his RIU presentation, it sounds like more will be offloaded before too long. I wonder whether this is partly the reason for the Trading Holt and whether the capital raising part could be capital raising into H2? He did mention in his presentation near term fizz for long suffering shareholders.

As observed previously it was a most unfortunate oversight not to have had staff closely monitoring plans and progress with the Fitzroy Bridg so have not to have missed the opportunity to maintain cashflow with 100% of Ungani.







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