The financial year of Covid is finally drawing to a close on June 30. Well in WA, other than the border restrictions, a lot of the day-to-day has been generally unaffected. Not so good for our eastern state friends.
Back to the Perth Basin (PB) and with the flow tests of WE4/5 over coming weeks, as discussed in the link below the shift in emphasis for STX holders, moves onto our 100% owned acreage/permits in Greater Erregulla, Haber, geotherm et al. The 21/22 year promises to be when the rubber really hits the road for the STX strategy.
https://hotcopper.com.au/threads/christmas-in-july.6055634/For holders who harboured any residual doubts around the Company's rapid expansion into Haber and other initiatives, the dramatic public escalation of discussion during the APPEA conference around sustainability, de-carbonisation and ESG has validated this pivot. Btw this pivot and all it entails is far more complex than simply being a vanilla O&G company but there is limited shelf-life in the latter. Like it or not, argue about ideology, the science, whatever, the thematic has changed and with STX being relatively young, fast and nimble, this is hugely advantageous.
Five years ago, my sense is that Waitsia, Beharra Springs and/or WE would have been a total investment Disallowed for any company you were invested in that had exposure to this extraordinary emerging basin. Most posters here would at least remember or hopefully made good money during the early days of the east coast CSG boom. It was like shooting fish in a barrel. Sure, some fish grew faster and were bigger than others but most investors got a good feed.
It's unfortunate but this time around it's not about being in the right basin but being on the right horse. And with the PB that horse needs deep technical IP, smart vision and strategy, hard working and determined leadership, excellent stakeholder relationships and good governance.
Some days/weeks it feels like STX is trotting but most of the time it has been a fast gallop. I'm really impressed how much this team has accomplished in the last two years. There will always be cynics and the haters but notwithstanding all the climate/carbon headwinds, the positioning of this Company with its spread of activities, massive acreage in the PB and contemporary vision has IMO set up the STX shareholders for a rewarding 21/22. This on top of material value creation over the past two years.
By contrast, our EP469 JV partner has IMO all but put up the white flag by going back to the market again. Back in October 2020 they raised $32m at 21c/share. Today we see the net sum of 10 months value creation in potentially the most exciting and prolific gas basin in Australia.
And what is that value creation....? A measly 1c/share confirmed by the announced CR of $50m at 22c. Yes, that's a grand total value accretion of $10m in nearly one year across the fabulous WE resource. [For context STX has increased by over $600m in value since the ''staggering'' announcement]. IMO $10m in accretion is an absolute disgrace and the shareholders should be demanding an investigation. If my math is correct, after this big CR, there will be close to 1.3 billion shares on issue for a non-operated interest in just one permit in the Perth Basin. How did it get to this? I expect privately, if not publicly, the shareholders will be totally disillusioned and downright angry. Surely they cannot justify continuing to pay what IMO is likely to be $5m a year of corporate costs! That's half the value that has been created over the past year. And for all those retail investors currently taking a bath, how distressing that any hope of a SP kicker from the WE4/5 flow tests has likely been dashed by this big raise. IMO can only imagine the opportunists lining up for this raise, happy to get their couple of cents (10%) gain and then selling out capping any material SP accretion. IMO there was always a risk that shareholders of this company would face more snakes than ladders on the 'investment board' because it's never been abundantly clear what the strategy ever was. And with the increasing climate/carbon headwinds, a passive management approach grounded IMO in hope and bitterness was never going to end well. Maybe this is the time when some of the covetous posters will (???) show some contrition and reflect on poorly considered arguments and the reality that for O&G in the 2020's a rising tide (the PB) will not float all boats. IMO with nearly 250 million new shares looking for a quick exit and outta here after the flow tests and then with a dearth of news flow over the next 18 months, it's going to be bittersweet looking over the fence and seeing all that big brother STX will have going on in 21/22.
For STX holders, with a ton of cash in the bank and an impressive portfolio of activities and initiatives being progressed over the next twelve months I'm really looking forward to a tremendous year of news flow, milestones being achieved, the Company being increasingly attractive to a broad investor base and strong share price accretion.
Christmas in July - for some!!
As always GLTA.
Cheers
Adaltiora
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