Santos Buy Quadrant US$2.15B, page-98

Hi,

With the information from STO, there is no way we can derive any reliable value for CVN as there are too many variables to consider e.g.

- The deal is effective 1 jan 2018. Does that mean all exploration expenses after that date (for Dorado and Phoenix) will be STO’s responsibility
- Why this deal was consummated only after Dorado success and not before? Does anyone know the price STO was prepared to pay before Dorado success.
- Macquarie being financial wiz kids would have taken more cash now (read Dorado’s success May have helped increase the upfront payment) rather than wait for future years
- STO still has to pay royalty to Flinders and Japanese for their portions acquired by Quadrant on top of royalty to Quadrant
- $500 million already received by Quadrant as prepayment is in addition to this current $2.15 billion deal
- STO would have readily agreed to Macquarie for extra upfront payment and reduce contingent payments for Dorado as that will help Santos to acquire CVN on cheap if it so desires (win win for both Santos and Macquarie