$50-60 New Normal or U.S Shale Bubble?, page-596

Croas,

am glad you are seeing the bigger picture.

re STO or ORG - a "higher price" is paid for "certainty" .......as such - il continue to hold ORG.

re STO b/evens - as you have mentioned - the debt reduction will definitely lower same.......as I previously mentioned - I rekon you will find the "reason" for this is to enable STO to get abt 100m in cash out of the JV and back to the parent - there is a preso by OSH - showing project c/flows, and debt service "timelines" ......STO has "another layer" ontop of the project finance facility ....

Santos - tis a long dated call oppie over oil prices (which are a proxy for JCC into Asia). As Croas is now seeing - it is an arbitrage play betwixt east coast dom gas prices, and JCC .......

very (roughly) - I rekon OP > approx. 80 - would enable STO to "mop up" other dom gas and export to Asia, and make a modest profit. What I DO NOT KNOW - is what impact on domestic gas prices if STO wanted to buy , say, 200 tj/day ......

hence my 1st comment.

I do agree - there is value inside sunny STO ......but they are going to spend a pile of money to realise it, or someone will knock it on the head (shell/ petrochina is my best guess)



rgds
Value_Hunter