Equus Energy (ASX:EQU)

**Investment Highlights** ✅ **Tiny market cap -** Only at a \~$80m market cap despite the Equus project having had \~$1.5bn of spend sunk in by US giant Hess Corporation prior to exiting WA in 2017. Note that WA domgas prices are trading 50% higher since Hess exited. ✅ **Woodside stalking -** Equus is adjacent to Woodside's $16bn Scarborough project which is nearing completion with Woodside actively seeking backfill gas for Karratha & Pluto LNG providing access to lucrative LNG export market (very high international prices).  ✅ **Scarce massive resource** \- Equus fields are very large totalling 1.7Tcf of gas and 37mmbbls of condensate (2C). ✅ **Funded to FID by Alcoa** \- Equus is funded through to final investment decision via a US$30m funding & offtake agreement with Alcoa (yes Alcoa are actually that concerned about securing future gas supply for their WA Alumina refineries that they are willing to backward integrate and cornerstone EQU's development). ✅ **Ridiculously tight capital structure** \- Only 205m shares on the register which is compounded by an even lower free float. 44% of all shares are escrowed for 12-24 months and the Top 20 hold a whopping 58% which is part of the reason why the post IPO performance has been so strong as there is nothing of size on offer given the IPO bookbuild closed in minutes ✅ **Impending WA Gas shortage -** The Australian Energy Market Operator (AEMO) is forecasting an impending WA gas shortage with tightening supply and demand dynamics as existing aging fields deplete **Catalysts** ✅ **Big oil strategic partnering process** \- EQU hold 100% of the project so naturally a partial (or full) divestment to big oil to fund our capex commitment is the most obvious funding and commercial pathway - my guess would be Woodside, Santos or the usual North Asian strategic buyers ✅ **Tolling agreement with Woodside** \- As I understand it discussions have been ongoing for many years with a 2022 non-binding agreement previously announced by Woodside. I expect discussions to ramp-up again now that Australia's energy security is back as a priority on the national agenda and another 3-4 year of depletion has since occurred at Woodside fields with no other viable feedstock identified. The clock is continuing to wind down for Woodside..