For a simplified view of what a successful W7 will mean for STX,...

For a simplified view of what a successful W7 will mean for STX, I will assume linear production and neglect field declines over time, and an average realisable sale price of 7.5/GJ

At the current production rate of 24TJ/d, the field will last approx 6.4 years till drained, raising a total revenue of 420mn over the total life of field at an annualised rate of 65.7mn, with NPV of 290mn for Walyering. If and when the interconnector to DBP is up and running (which is for 10TJ/d), and we can raise field production to 34TJ/d (not going to assume higher until the plant has been upgraded), the field will drain in about 5yrs with NPV of 308mn due to faster cashflow generation within a shorter timeframe.

Now, if W7 successfully delivers an additional 34PJ of 2P reserve, it will extend the field life (at 24TJ/d without the DNP interconnector) to 10.3 years, generating total revenue of 676mn over life of field, with a NPV of 393mn. With the DNP interconnector in place and daily production is increased to 34TJ/d, it will have a field life of 7.3 years with NPV of 435mn.

So W7 success is worth an extra 100-130mn in NPV terms to STX (quite a bit when the company is valued at 686mn by the market).

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