santos appears to have supply problems, page-2

Holy,

Dont go all Rational now, we enjoy the Numba-Ones.
An Interesting analysis.

My interpretation is that STO needs a gas supply that is not dependent on water pump-out variability, to provide a steady baseline supply for the plant. Hence the conventional Cooper. STO presentations make big of the Cooper potential showing how the well spacing is nowhere near like the USA yet. Their infill programme will turn it into swiss cheese. BPT makes a big thing of the Unconventional Cooper with its estimate of their GIP of 200TCF.

The STO Roma storage fields will ensure some of that supply stability as well.

Management of such large numbers of wells producing at variable rates dependent upon the stage of seam water depressurisation is a new skill to be mastered. Storage will be critical.

Already we have AGK in the business of storage for BG via its MOS acquisition. ORG also supplying BG during ramp up.

This announcement by STO today of an "oil-linked pricing formula" for Cooper gas , with JV partners BPT and ORG, makes you wonder how many $ over the domgas price it will be. (Wasnt that BG - ORG deal rumoured to be $6/GJ)

Definitely great opportunities for any company with uncontracted gas to make margins much better than domgas if it can be swapped or piped to QLD.


I still reckon that consolidation will happen, when all the emergent problems become too much to handle economically without a larger JV approach.



Cheers