WGO vs STX

I wanted to start this thread to discuss the difference in valuation between STX and WGO. Initially I held STX and had good profit, then I saw the following imbalance between the two partners and I have switched my holding to WGO.

The MCap (valuation) of the two companies has been in lockstep during the discovery then WGO pull back more sharply than STX and stayed down.

Over the last 6 months STX has increase ~350% and WGO ~265% which approximately translates to market capitalisation changes of:

WGO ~90m -> ~240m increase of ~150m.

STX ~115m -> ~400m increase of ~285m.

Difference of ~135m. I’ve kept it approximate as the prices are changing every day so is the market cap etc.

The three main differences I interpret between the companies are:

1. Recent Capital raise overhang, although STX will have this soon also IMO.

2. Non-Operator position, with STX being the Operator of the Permit, they are in the driving seat of appraisal and development decisions.

3. Acreage position. STX have a larger acreage position in the basin.

I’ll leave 1 and 2 alone from someone else to comment on. But 3 I want to have a stab at.

I agree it was a good move by STX to grab the acreage from UIL. However, having a regionally pervasive reservoir doesn’t mean there are structural traps for the gas. In my view EP349 is the best of the lot and WGO are 50% on that one so no difference there.

Beach have locked up the largest prospects to the south on the Donkey Creek terrace. After the Eneabba fault the Dandaragan Trough dips down gradually deeper and deeper, no trapping mechanism there. I don’t see there being a significant valuation placed on these undrilled, fault bound prospects defined off 2D. Certainly no more than 25million…

Thoughts anyone?