Few facts to consider. NXS has long term contract to supply around 250PJ over the next ten years to SANTOS. It will cost STO around $100 million per annum ($4/GJ) based on 25 PJ per annum. So over the next ten years STO has to spend around $1 billion to buy 250PJ of gas. They also have option to buy up to 350PJ. If they decide to take that additional 100PJ it will cost another $400 million. So altogether around $1.4 billion over the next ten years for 350PJ. NXS has additional gas volumes of 71PJ which have been assigned to the Contingent Resources category until such time as a firm sales contract for the additional volumes is secured. So down the track STO may decide to buy that as well (possible another $285 million).I know that to produce all of above gas they would need to drill another production well (Longtom5) .It is safe to say that Santos will spend around $1.5 billion over the next ten years buying gas from NXS.
At today SP of 25c MC is $240 million plus dept of $296 million & cash on hand of $44 million.
IMO it is cheaper for STO to takeover NXS than to continue to buy the gas.
If STO is even to offer 100% premium at today prices (imply SP of 50c) it will only cost around $750million including debt to takeover NXS. Half of that $1.5 billion they will spend over next ten years plus they get all additional assets like CRUX, Echuca Shoals etc for free. Crux with 65MMBBL * $5/bbl = $325 million. I know it is simplified approach but figures are compelling. By the way I am not saying that it will happen . Any comment is welcome.
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27.5¢ |
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Mkt cap ! $80.21M |
Open | High | Low | Value | Volume |
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No. | Vol. | Price($) |
---|---|---|
1 | 19549 | 25.5¢ |
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Price($) | Vol. | No. |
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27.5¢ | 9999 | 1 |
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No. | Vol. | Price($) |
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1 | 19549 | 0.255 |
2 | 8691 | 0.245 |
2 | 6376 | 0.235 |
2 | 17071 | 0.230 |
1 | 4545 | 0.220 |
Price($) | Vol. | No. |
---|---|---|
0.275 | 9999 | 1 |
0.285 | 16064 | 1 |
0.295 | 3390 | 1 |
0.300 | 32437 | 1 |
0.305 | 7749 | 1 |
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