There is no doubt that the Market Cap of the new merged entity...

There is no doubt that the Market Cap of the new merged entity is at the high end considering its only assets are exploration targets. One has to consider the downside if West Erregulla is a duster.
The fact that the forthcoming drill is a large, close to market, onshore and close to existing fields should give us strong market interest in the next couple of months, so I reckon the market will ignore the high pre-drill valuation.
And I reckon your point re the reduced leverage due to the current high market cap is correct.
But STX as an entry point to the drill is even less attractive so my money will be on WGO.

Gosouth