Looking forward to 2020, page-30

I'm a fan of the merger thesis.

In addition to the points you make, a merger would create a combined entity with a market larger market cap, making it hard to take over (low ball) and have a bigger profile in the ASX 100/200, raising demand from institutional investors.

It would also increase the company's profile and make raising capital easier and cheaper (on a per unit basis) and eliminate the issue of coordinating capital raisings (and the negative dynamics for the share prices of both company's).

At the moment, a big boy could make things difficult by taking out one or the other. For example, if Beach took over WGO, they might start dragging their feet on development work, potentially softening up Strike for a lowball takeover down the road.

I know some people think share price manipulation is like the tooth fairy, but the share price of a combined entity would be harder to manipulate because it will have a higher profile and more institutional investors, and because the share price dynamics between the companies will be eliminated. In this regard, look at the hit WGO took (unjustified I think) when Strike raised capital recently, and didn't really bounce back. A merged entity would not be subject to these dynamics, where capital raising uncertainty of one company bleeds over to the other.

Finally, a combined entity would also be a juicier target for a real big boy (like Woodside or Chevron), who could buy up half the basin in one fell swoop.

Given all this, it is no surprise that at the AGM Q&A, SN intimated a merger would be a good outcome. And if they think the share price is being manipulated for a low ball takeover, they would want to get a move on, because a merger would also be the best form of defense, especially if the share price weakness continues between now and the start of seismic and follow-up drilling.