STO to CTP – “Guess Who is Your New Partner?”, page-7

Thank you, paul harris, for originating this thread with your thoughtful post.

I observe:

CTP may still have a live 'right of last refusal' to buy STO's half of Mereenie at $52m + $1. RC may be scratching around to find capital - say, $25-30m and borrow the rest. That is a big ask when market cap is $82m. (note my 2x 'may')

I for one would willingly support a CR to buy the second half of Mereenie. Others may not share my enthusiasm.

STO is an O&G company, MCQ is not. It will rely on CTP as operator for all technical activity. As the active partner, CTP could argue for an operator's fee before splitting Mereenie's profits, or oblige MCQ to pay more than alf of the needed development cost.

I surmise RC is negotiating a fresh joint venture agreement with MCQ, who entered with a plan - including exit strategy.

NGP will be operational mid-2018, only 18 months away. CTP has a willing buyer in IPL Phosphate Hill for substantial volumes of gas. This is in addition to existing customers currently providing useful and regular
cashflow (P&W, McArthur River mine, etc) 18 months is a long time in O&G and no help today.

I have just read a poster's opinion we are investing in RC, not central Australian O&G. This is probably right.

We have to acknowledge the unlikely possibility RC is currently snookered and is clearing his mind with the aid of old mates and a bottle of whisky.

The current uncertainty will clear soon. The direction it takes is beyond my ken.

Ash