The STO shareholder review that accompanied the financials with...

The STO shareholder review that accompanied the financials with the headline "Creating a better world through cleaner energy" contains this little comment about the Cooper Basin ...

"Santos’ share of Cooper Basin sales gas and ethane production of 57.8 petajoules (PJ) was 9 per cent lower than the previous year (63.8 PJ) due to natural field decline"

So if you are seeing natural field decline from dirt where you have a very high success rate in drilling and you know of a neighbour sitting on upto 21 tcf + condensate (which is arguably more attractive than the gas) and whose dirt you have derisked by successfully drilling and fracking next door and for which only you alone know the flow rates then surely it is a bit of a no-brainer.

STO has more than doubled doubled free cash flow compared to the previous year and its gearing is down to 18.9%.

So a couple of hundred million $ to make a bid for a derisked plot of land next door would hardly make a dent in STO's finances and at the same time would add substantial potential reserves to the balance sheet if it can be drilled and fracked before the end of the current annual reporting period.

Now STO's results are out of the way and strategy has been made clear for the near term I would be inclined to argue that BAS is even more attractive to STO today then it was yesterday.

A lot of assumptions made in this post I know but reading between the lines is where the value is at the speccy end of town.

I still expect some sort of link up with STO whether it is a takeover bid, JV, farm in whatever it doesn't really matter to BAS and BASO holders and I would expect that to happen soon following which I would further expect other interested parties may be inspired to show their hand.

I bought my BASO nice and cheap early last month so I am not fussed how long it takes.

EB