Conference Call Summary

Below is a summary of the conference call.


Financial Close and FY19 Outlook

• Financial close is just procedural (i.e. dotting i’s and crossing t’s) and not contingent on anything
• Expected in 4-8 weeks
• Outlook (in terms of production and capex) will be provided following financial close
• The outlook will not just be for FY18, but will be for FY19 and FY20 and possibly FY21 as well!

Western Flank

• 10 wells being drilled by BPT – SXY is fully carried in FY19
• Brigade 1 has already discovered oil, will come into production Q3
• SXY’s strategic priority is Western Surat and will be deploying capex there

Project Atlas

• Has 144PJ booked reserves over 2/3 of the area
• SXY expect 278 PJ over the life of the asset
• First sale expected by end of 2019
• Expecting an initial 15 wells to be drilled Q3 FY19

WSGP

• Only commenced in December
• Reservoir performance is good and the good sub-surface performance increased reserves
• SXY has gained enough confidence in the sub surface to be able to make FID next quarter
• The lower run rate from the wells was due to downhole failures / teething issues (resulting in a well availability factor of 70%, it is up to 80-85% now, and expected to get up to 90 -95%)
• SXY’s first priority is Gleonora/ Eos/ Atlas – they are planning an integrated campaign that will drive efficiencies and unlock value to shareholders
• Total of 100 initial wells between WSGP and Atlas
• Commence drilling following completion of these milestones (FID and financial close)

Gas Sales Agreements

• Gas sales agreements are planned to be diversified away from oil- linked contract
• Expected to be fixed plus CPI (portion of portfolio subject to spot market).
• Plentiful demand from customers

Inorganic Opportunities

• SXY is always on the look for inorganic opportunities that are able to improve resource base and margin (so long as they are able to increase portfolio without disrupting value of existing assets).

Other

• Vanessa is producing at 4million scf /day
• Gemba fracture stimulation scheduled for Q3 FY19
• SXY has 281 PJ of ‘other’ reserve – there is a planned appraisal programme over the next few years (but no capex committed to this at this stage)

My thoughts on the above:

1. Financial close is imminent (4-8 weeks) and the outlook that will accompany this will be a 2-3 year plan which will be extremely price sensitive (as uncertainty about the future is removed)
2. The wells being drilled by BPT are all free carried – we should receive regularly updates as these are (hopefully) successful and then when they come online
3. Should see 15 wells drilled for Atlas starting Q3 in FY19 (Jan-Mar 2019)
4. Should see another 85 wells for WSGP/Atlas (timing of which should be made clear via the outlook paper) – this is the most exciting for me
5. Gas sale agreements will follow financial close – price sensitive as SXY further de-risked
6. We could see some acquisition news (as SXY are on the look out) – I think this is what the market didn’t seem to like yesterday (the market is strange about acquisitions – just look at BPTs share price around / during their acquisitions, only to see it rocket off after). Whilst ID mentioned it, I cant see SXY actually acquiring anything in the short term, as they appear to be fully focused on the WSGP / Atlas.

Overall I think affirms how much potential and upside we could see in the next 18 months, and I think the outlook paper will confirm this shortly.