Hi @nessy , thanks for the call out,

I haven't changed my valuation too much since the previous post. The Talon takeover was a fair and reasonable deal, don't think it adds too much value per share. The South Erregulla drilling looks about on par with my model (ie it had to find some gas and did, although SE3 sounds a little dicey)

I read the WA Gas Statement of Opportunities (GSOO) on Thursday, which is what the age would be referring to. You can read the full thing here . I think on the face of it not a lot new here either, the looming tightness of the market last year and therefore appreciation in prices was core to the purchase thesis last year, its playing out, but I wouldn't be comfortable putting my A$8/gj price (real terms) up much higher for a long run model. Some might accuse me of being conservative, I'd probably take it as a compliment. Consider this....., the mid case scenario that AEMO has put out in the GSOO doesn't even include gas from West Erregulla, arguably Strike's top asset. It would only take 80TJ/d from West Erregulla and maybe a little more to balance the market again and all the furore could subside. My point is, its a model that is controlled by a handful of people and they can move the market from shortfall to surplus on the basis of a few unknowable assumptions.

The big announcement to watch, and what I think might be behind the share price rise the last week or two, will be on Thursday, when the government inquiry issues its interim report on domestic gas reservation. I don't live in Perth, but I sense optimism abounds in the gas sector about a relaxing of the 100% dom gas cap for onshore, pipeline connected fields. I don't have any inside info on which way it will go, a few months ago I would have been shocked if they relaxed this, partly because one of Roger Cook's first actions as premier was to reaffirm the export ban! However, there's a bit of smoke that could be fuelling the speculation, 1) rising prices of companies like strike, 2) the inquiry delayed releasing the report until basically the day before Xmas when no one outside the industry will be looking, 3) Cook has gone heavy pro resources lately, looking to legislate to cut "green tape" to accelerate projects and been saying WA will power the world's energy transition with more gas, lithium etc and 4) there was a draft of that WA GSOO a few months ago that showed a much lower demand profile for gas, then it changed, did the politicians get their hands on it with a pro gas agenda? Are they trying to scare the public into accepting a more export friendly setup with the forecast of a dire shortall 5) Woodside have a big half empty NWS LNG facility up there, and maybe in exchange for Woodside topping up the domestic market in the short term the govt will open up onshore gas to export so Woodside can toll it through their facility. This would be a big win for Strike who could accelerate development and expect higher prices. Even with all that I'm not prepared to call it! If the recommendation is to uphold the onshore ban and somehow just force the lng players to provide more gas domestically you could see prices soften again and Strike face the old problems of having to make urea, or delay/stagger development so as not to flood the gas market.

Personally, and this is not advice, I might (might, probably won't) lighten my strike position just a little if I can get >48c or so this week, only because I was also a talon holder and now have quite a large holding, I also went past the 1 yr holding period last month too. Plus there's a bit of downside risk if people are just getting excited about the gas reservation and the dom gas reservation is upheld on Dec 22nd. Maybe the inquiry will put forward a relaxation in the interim report, the share price will rocket.....but then the premier can be a hero and shoot it down for the people.....I'm getting pretty conspiratorial now!!!

A big week ahead

Excellent insight as usual @Longpar5 . There is also the question of takeovers. Is STX now too big to take over or is it in a prime price for a local billionaire to be interested. Many questions to be answered. I am certainly not overweight by any stretch so happy to see it play out a little longer.

Certainly still in play @nessy Again, if export restrictions are lifted those billionaires are going to be even more incentivised to lock up their own gas supply. All will be quiet until the outcome of the inquiry is known, but it could be on shortly after. I also think Mitsui and more likely beach will have their eyes on Strike, a beach merger could be proposed once their new CEO settles in