crux sell down-make or break

from some BOA/Merrills notes

There is no doubt, in our view, that NXS’s assets are worth more than the current share price would indicate, however unlocking their potential is fraught and it is
questionable whether NXS has the team to crystallise this value. But, with their equity raising now behind them and their near term funding requirements secured we believe the risk reward balance is more palatable. Due to an increased probability of the Crux development progressing, which is a significant driver of our valuation, we upgrade our recommendation to Neutral and our price objective
to A$0.41ps.

Catalysts Present, but Risks Abound
NXS’s clear near term catalyst is the Crux equity sell down. If NXS are able to attract a seasoned offshore partner to the project a re-rating for the stock seems
inevitable. With markets improving the probability of achieving this goal at a reasonable price has increased demonstrably, but with Shell owning the gas rights and a Dec 2020 cut off date for the liquids stripping project there are still significant risks to this transaction.

Valuation Uncertainty
With NXS being required to conclude the Crux sell down within a tight time frame and such a large portion of NXS’s NAV driven by the outcome of this transaction, valuation uncertainty is a natural outworking. In short, we see a bull case for
NXS of A$0.66ps and a bear case of A$0.32ps.