Yeah that's what Euroz is trying to say. With the successful...

Yeah that's what Euroz is trying to say. With the successful conversion of the 2C to 2P at SE, it will bring STX's 2P/2C reserve mix closer to those of WGO, which was valued at $2/GJ of 2P/2C. It reads to me that it is only referencing the WGO deal as a benchmark valuation in the event of a takeover but its own valuation has STX at 60cps. Not sure from the above whether it is valuing STX using a risked NAV alone, or a hybrid risked NAV/DCF valuation model though.

Either way, I think almost all the analyst reports out there have one thing in common - that STX valuation is between 55 and 60cps. Even with all the macro headwind and uncertainties surrounding the inflation and potential global recession (soft or hard landing), China's massive debt and potential stagflation challenge, etc, I have been comfortable buying STX at current levels because regardless of all else, STX's growth prospect is tied to the WA gas market. With gas demand profile (esp industrial usage) unlikely to change regardless of the economic landscape (iron ore, urea, and critical minerals - esp when there are more projects to come online such as WES's Mt Holland lithium project), STX is almost a good "defensive" play if one is confident in its reserves and its planned production ramp up capabilities. With my own calc having STX at 95cps, which I am comfortable with, assuming they can convert sufficient 2Ps for 15-20 years of production life, there is enough safety buffer in the current share price to warrant topping up

When you throw in the anxiety by the large industrial consumers such as WES (which had recently publicly questioned whether WDS is intentionally withholding gas supply and the general pressure of high gas price on the economic viability of some projects), I think it would be surprising if one of the large cap gas companies or industrial users don't have a good look if the implied gas value per 2P/2C is cheap enough.

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