STX deal in numbers, page-11

For those wondering what forced TPD into the merger, think none other than the woke left Labor....

Under Scenario 2, Condor has lost its appeal as the revenue cash flows are significantly lower with Labor's latest market meddling. Furthermore, it has reduced revenue available from Walyering. The only way to ensure value is maintained was to consolidate and remove the duplicated corporate costs. Now whilst export gas pricing existed, the prize for Condor was greater, which may have attracted investors and allowed TPD to access equity funding via a CR. Without the benefit of higher export gas pricing, Condor lost its appeal, investors ran and TPD had to accept STX's offer. You got to laugh how Labor single handedly have shattered the feasibility of the Perth Basin. Go woke, go broke

Scenario 1 (I.e. before Labor's export ban) sees us with a higher share price and higher GDP. Everyone wins.

Scenario 1 - gas reservation policy 15% domestic, 85% can be exported.

• Royalty is 10%
• Let's say export gas is $30/GJ
  • Royalty = $3/GJ
  • 85% / 15% = 5.5x domestic production, so if royalty is used to subsidy gas prices is can directly offset $16.5/GJ
• Let's say domestic gas $30/GJ (even though it would never reach this level due to 15% reservation).
  • Royalty =$3/GJ

Under this scenario, from royalties alone there is $19.50/GJ that could be applied to domestic gas prices bringing the cost to the user to $10/GJ (which is what Labor are trying to achieve).

Gas producers get revenue of $30/GJ.
(Perth Basin producers and explorers' share price benefits)

Investment in Australian gas projects booms, there are more local jobs, more tax is collected and Australians that invest in gas assets make money.

Scenario 2 - gas reservation policy 100% domestic, export ban.

• Royalty is 10%
• Domestic gas $10/GJ (through price control).
  • Royalty =$3/GJ

Under this scenario, domestic gas is $10/GJ (which is what Labor are trying to achieve).

Gas producers get revenue of $10/GJ, but worse not all gas producers are equal (as BPT is allowed to export gas)
(Perth Basin producers and explorers' share price is stifled, forcing consolidation to survive)

Investment in Australian gas projects is stifled due to the meddling by the left wing socialists. Investment in gas projects moves to more accommodating countries (Japan have moved to Dubai). Gas projects dwindle, there is job uncertainty for those in the gas industry, and workforce cuts. Gas supply drops, and risks higher local gas prices anyway (plus less people employed and lower GDP).

Investors in gas assets see share price deterioration, but those in WA (maybe) get the benefit of lower gas price

Go woke, go broke