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Conference Call Summary, page-8

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tt2000

2,345 Posts.

539

05/09/18

01:37

Post #: 35416931
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Originally posted by tt2000 ↑

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:

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)

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

Should see 15 wells drilled for Atlas starting Q3 in FY19 (Jan-Mar 2019)

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

Gas sale agreements will follow financial close – price sensitive as SXY further de-risked

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.

Expand

As per the above, execution of gas sale agreements is imminent.

Below is an extract of the potential range of gas pricing that we can expect - depending on price and quantum of gas sales agreements, this could be a catalyst for some nice share price action - just need that financing deal to complete...
SXY Price at posting: 48.0¢ Sentiment: Buy Disclosure: Held
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0 Great analysis

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