M&A TIME: WOODSIDE/ SANTOS IMPACT

Energy world changing very quickly with Woodside/Santos merger under discussion.

Potential Woodside Santos merger means:

Investors have to start supporting juniors as alternate investment opportunities- can’t have entire Energy exposure in one big stock so some money has to flow into smaller names.

Juniors need to bulk up - for liquidity, growth and scale - and also to become investable for generalist funds - so expect rapid consolidation amongst few remaining relevant names - to create investable second tier

Merger allows new Woodside better funding ability, more political clout (needed to deal with bad / hostile policy), and better ability to compete internationally - especially in LNG markets- idea is to create national champion

Merger also highlights lack of organic growth projects in domestic industry due to lack of market support, geo-maturity and political mismanagement .

At least apart from the Canning and Beetaloo (leaving soon). Definitely a case of use it or lose it.