Step-Change news imminent

I think the strength in the SP is a recognition by the market that significant news is imminent, and that news will herald a step-change in the growth of COE.

This is just my opinion - DYOR

We know:
- FEED now is actually completed.

- now doing Quality Assurance by Independent Consultants. That was to take 2 wks I think - and time is up.

- then Farmout. I think all that work ahs been done. COE said plenty of interest, from all sorts of parties (international, I think also private equity, existing O&G players, plus of course gas users). So I reckon its already sorted - they are just crossing "t's" and dotting "i's"

- COE has previously referred to "aligning interests" in this development. From my understanding The development is the total package of Sole and Manta. So imho only, I reckon the "alignment of interest" will involve a change of the J/V interests of both Santos and COE to enable a new Farminee to take-up a meaningful interest in J/V. I also think the new Farminee will likely be more than credible partners. eg an AGL etc.

- then Funding finalisation - once Farmout is agreed and J/V interests are finalised, it will allow COE to finalise its funding package. COE have stated they already have decided on the "finance and strategy plan" and have "initial engagement" completed. So all they need to do is execute the funding strategy with lenders. It all depends on the final % COE will retain, but it will inject Manta into deal, so value there, and COE already has 50% of Sole, so COE probably will sell-down to maybe 35%-40%?? So hopefully this will significantly reduce the funding requirement of COE. COE have already stated they will select the best option to give best return to COE and its shareholders.

- then FID. This will be a lay-down-misere (spelling?). This will be in Dec Qtr - which starts in only 1 week! I think FID will come rapidly after Funding and farmout news. it's only needs a review by boards of COE and Santos, then approval. Rubber stamps imho.

Given my take on the emphasis in the latest presentations, we may get some extra news in addition to above:

I think more positive surprises to come.
I think we might get a surprise on:
-Farmin partners - the bigger the better as that adds to credibility
- surprise on bigger equity share to be held by COE?
- a surprise on lower costing - COE has alluded to the previous estimates of project cost as being $552m, but that figure may reduce because of competitive bidding in low oil price environment, synergies with drilling, lower material costs etc. That will reduce COE $ commitments.
- a surprise on 3rd party arrangements - eg more gas from 3rd parties to flow thru Orbost. We have seen media about Seven/BPT wanting to restart Longtom - so maybe some news there??
- a surprise on the prospectivity of Manta Deep. it sounds like Manta Deep has big resource which could change the dynamics of the project.

so I am getting 'antsy" waiting for the news flow.

cheers