STO is polarising analysts, fund managers and retail investors alike. Consider recent research notes from 2 of Australia’s largest brokers: one with a valuation/price target of $5.50 and the other $13 even! But of course with confusion and uncertainty lies opportunity. So with a sense of opportunity in mind we caught up with the company in Perth today. 3 (important) things that were confirmed: 1. STO believe that infrastructure assets are getting ‘very good prices at the moment’ and that these assets are ‘cheaper to fund in someone else’s hands’. Whilst there is a lot of gas to pass through the pipeline, we take this as confirmation that STO’s clear preference is to sell this asset. 2. Fairview is a ‘world class field’; company forecasts of 1 TJ/day are being well and truly exceeded with production consistently up around 2.3/2.4 TJ/day. 3. A placement remains off the table at the present oil price: STO have many levers to pull, and even at this deflated oil price will be able to generate solid Free Cash Flow (FCF) and begin repaying debt.

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