Been meaning to compare BPT's funding structure for the acquisition of Lattice in terms of Enterprise Value / debt.
Going from memory here (did the calcs at lunch, but left them on a notepad in the office).
Pre Lattice acquisition - BPT had an EV of circa $1,250M. They did a capital raising at $0.75 to partially fund the acquisition. They then added debt of circa $1,300. Fast forward a year, and the share price went from $0.75c to $2.00 - obviously based on a successfull deployment of that debt.
SXY is now trading at around $0.50, giving us a EV of $660M. SXY will use about $510M - $560M of debt (including the "off-balance sheet" debt of the Jemena transaction and WSGP estimate).
Assuming SXY do deploy this full capex (we already know that $150M via Jemena is going ahead), it shows SXY is going as aggressive as BPT was last year relative to our EV.
I would argue we are going more aggressive, as BPT used the funds to acquire a cash flow generating business whereas SXY are using these funds to drill.
Therefore, IFF SXY are successful in our projects, (given the higher risk involved), I do think we have the potential to replicate what BPT did, with some loose change.
Tomorrow's FY19 outlook will be the key to understanding this. I'm really looking forward to it. Hopefully they provide us with the expected well run rates and IRRs as I would like to see the expected cash flows / NPVs. I would also like to see financial close for the financing solution.
Big 18 months (subject to confirmation tomorrow)!!!
