Sacgasco poised to pounce in the Australian energy sector.

Summary

In the 'Market Open Direct' webinar, Stuart Walters hosts Kane Marshall, Managing Director of Sasco Limited (ASX: SGC), to discuss the company's recent operations and future outlook. Marshall highlights the company's shift in focus from international assets to domestic opportunities, particularly in natural gas, amid the energy crisis in Australia. He also addresses the company's rebranding to reflect its commitment to oil and gas, contrarian to the prevailing decarbonization trend. The discussion includes potential investments in larger-scale projects and the strategic advantages of the current geopolitical and energy market conditions.

Takeaways

• 📈 Sasco Limited is focusing on diversifying and broadening its portfolio, with a shift towards more domestic upstream opportunities, particularly in natural gas.
• 🌏 The company has almost completed its need investment and is now looking to rationalize its portfolio, moving away from positions in the Philippines and potentially North America.
• 🛑 There is an ongoing issue with non-payments from Blue Sky Resources after Sasco's exit from the Philippines, which the company is working to resolve.
• 🔍 Sasco is currently reviewing several projects, mainly in Western Australia, with a focus on low-entry point acquisitions that have significant upside potential.
• 🏭 The energy market in Western Australia is strained with high gas prices and a lack of new supply, presenting an opportunity for junior companies to explore deeper gas potential.
• 📉 Gas prices in California are currently weak, which is a factor in Sasco's strategic planning as they have significant operations in the energy-hungry state.
• 🌱 Sasco's management believes that oil and gas companies are part of the solution to a cleaner economy, not the enemy, and that their products are essential for the materials needed in electric vehicles and decarbonizing economies.
• 🛑 The company is considering a name change back to 'Australian Oil Company' to better reflect its focus and be more recognizable in the market.
• 💡 There is a supply issue with reliable, low-emission electricity in Australia that the government has yet to adequately address, which Sasco sees as a significant opportunity.
• 💼 Sasco is looking for larger opportunities that have been overlooked by bigger companies due to regulatory issues and a shift in focus abroad, such as in PNG and Alaska.
• 📊 The equity markets are currently strong and favorable for energy investments, and Sasco aims to capitalize on this by raising capital and securing new projects within the next six months.

Q & A

What is the main focus of the Market Open Direct webinar series?

The Market Open Direct webinar series is focused on providing a platform for companies to tell their story, explain why it's compelling, and present why it's an opportunity for investment.

Who is the host of the webinar and who is the guest speaker in the provided transcript?

The host of the webinar is Stuart Walters, and the guest speaker is Kane Marshall, the managing director of Sasco Limited.

What has Sasco Limited been focusing on in the last six months according to Kane Marshall?

In the last six months, Sasco Limited has been focusing on the completion of an investment need, divesting their position in the Philippines, and looking at opportunities to broaden and diversify their positions in North America with a more domestic focus on natural gas.

What is the current situation with Sasco Limited's investment in the Philippines?

Sasco Limited has decided to divest their position in the Philippines, as they believe it is not an area they need to be in over the next six months.

What is the energy situation in California according to the discussion?

California is described as an energy-hungry state with currently weak gas prices, and structurally different markets compared to Australia.

What opportunities is Sasco Limited looking at in Australia?

Sasco Limited is looking at opportunities related to the energy crisis on the east coast of Australia and the deficiency in gas supply in Western Australia, with a focus on natural gas and potentially oil as well.

Why is Sasco Limited considering a name change back to its founding name?

The board of Sasco Limited is considering a name change back to its founding name, 'Australian Oil Company Limited,' as it believes the name reflects their focus on oil and gas and is a strong brand that aligns with their business direction.

What is Kane Marshall's view on the role of oil companies in the energy transition and decarbonization?

Kane Marshall believes that oil companies are part of the solution rather than the enemy in the energy transition and decarbonization. He emphasizes the importance of fossil fuels in creating materials for a cleaner economy and suggests that the focus should be on embracing oil and gas companies as part of the solution.

What kind of opportunities is Sasco Limited looking to target in the Australian Capital markets?

Sasco Limited is looking to target opportunities that involve exploring for gas in deeper basins, focusing on bigger opportunities that have been overlooked by larger companies, and considering oil, gas, and potentially subsalt helium plays.

What is the current situation regarding non-payments from Blue Sky Resources after Sasco Limited's exit from the Philippines?

Sasco Limited experienced nonpayment from Blue Sky Resources for the second transaction related to their exit from the Philippines. They are working to resolve the issue and are looking at ways to extricate themselves from Canada while keeping the company recapitalized.

What are Sasco Limited's plans for their North American leases?

Sasco Limited is looking to rationalize their North American leases, considering Red Earth as potentially non-core and exploring bolt-on opportunities and expansions into more domestic opportunities, particularly focusing on areas with bigger upsides that can excite the market.

What specific projects is Sasco Limited currently reviewing or in discussions about?

Sasco Limited is reviewing about three or four projects, mostly in Western Australia, with a focus on low entry point acquisitions that they can develop with their expertise and potentially promote out with like-minded juniors.

What is Kane Marshall's view on the current equity markets and energy markets, and how does he suggest Sasco Limited strategically take advantage of geopolitical issues?

Kane Marshall views the equity markets as currently being in a 'risk-on' mode, with energy being a great space to invest in due to ongoing geopolitical tensions and the importance of energy security. He suggests that Sasco Limited should focus on getting properly capitalized and having the right projects in place to take advantage of the current market conditions.

What does Kane Marshall see as the most significant upside for investors looking at Sasco Limited?

The most significant upside, according to Kane Marshall, is the potential for substantial growth, as the company is currently capped at a low market cap and is looking to capitalize on new projects. He believes that with the right moves, the stock could easily see an increase to a higher range, offering significant upside for investors.

Outlines

00:00

📈 Introduction to Market Open Direct Connect

The host, Stuart Walters, introduces the webinar series 'Market Open Direct Connect,' which allows companies to present their stories and investment opportunities. Managing Director Kane Marshall of Sasco Limited (ASX: SGC) will update the company's operations and engage in a Q&A session.

05:00

🌍 Update on Company Operations and Future Prospects

Kane Marshall provides an update on Sasco Limited's operations over the past six months, highlighting the company's investments in North America and the Philippines. He discusses the focus on the domestic market, particularly in natural gas, and mentions the potential impact of Middle East tensions and energy crises in Australia. The company aims to diversify its portfolio and rationalize assets, focusing on domestic opportunities.

10:02

⚖️ Strategic Initiatives and Energy Market Perspectives

Marshall addresses the challenges in Australia's energy market, emphasizing the need for reliable energy supply. He criticizes the lack of new ideas in exploration and regulatory issues affecting the industry. Sasco Limited is looking for significant opportunities in oil, gas, and potentially helium, aiming to capitalize on the current market conditions.

🔄 Transition to Founding Name and Decarbonization Views

Marshall explains the board's decision to revert to the company's founding name, Australian Oil Company Limited, to reflect its focus on oil and gas. He shares his views on decarbonization, stressing the necessity of fossil fuels in the transition to a greener economy and positioning oil companies as part of the solution rather than the problem.

💡 Strategic Opportunities and Non-Payments Issue

Marshall outlines Sasco Limited's strategic focus on acquiring and promoting new projects, particularly in Western Australia. He addresses the issue of non-payments from Blue Sky Resources after exiting the Philippines and the company's efforts to resolve this while moving forward with new ventures.

🌐 North American Leases and Future Plans

Marshall discusses the company's leases in North America, particularly the Red Earth and California assets. He mentions the need to rationalize these leases and focus on bigger opportunities that can excite the market. The company is also reviewing multiple projects, emphasizing the need for significant scale and potential.

📊 Equity Markets and Geopolitical Considerations

Marshall comments on the current equity markets, influenced by geopolitical issues like the Middle East conflict and US politics. He highlights the importance of energy security and the company's strategy to capitalize on strong market conditions by securing new projects and recapturing investor interest.

💬 Closing Remarks and Future Webinar Updates

The webinar concludes with Stuart Walters thanking attendees and summarizing key takeaways. He expresses optimism about Sasco Limited's future and looks forward to updating participants on future Direct Connect webinars. Kane Marshall also thanks the audience and emphasizes the company's efforts to recapitalize and pursue new projects.

Keywords

💡Market open direct

This refers to the webinar series aimed at companies to tell their story and present investment opportunities. It is the platform through which Sasco Limited is sharing their updates and plans.

💡Sasco Limited

An energy company, traded under ASX code SGC, providing updates on their operations and future plans. The company is transitioning from international to more domestic opportunities in Australia, particularly in the energy sector.

💡North America

A region where Sasco Limited previously had assets. The company has been involved in Canada and California but is now divesting from these regions to focus more on domestic opportunities in Australia.

💡Middle East tensions

Refers to geopolitical issues affecting the energy market, particularly related to Israel and Hezbollah. These tensions impact commodity prices and market dynamics, influencing Sasco Limited’s strategic decisions.

💡Energy crisis

A significant issue in Australia's east coast, with high gas prices and a deficiency in supply. Sasco Limited sees this as an opportunity to diversify and strengthen their portfolio with domestic energy projects.

💡Natural gas

A primary focus for Sasco Limited’s future investments. The company is looking to expand its portfolio in Australia, addressing the gas supply issues and leveraging opportunities in both the east and west coasts.

💡Commodity spaces

Refers to the markets for various commodities like gold, uranium, copper, and energy. Sasco Limited is strategically positioned to benefit from these markets, which are seen as strong investment areas.

💡Australian oil company

Sasco Limited’s identity and strategic focus. The company emphasizes its role in the oil and gas sector, distancing itself from renewable energy projects, and rebranding to reflect this core business focus.

💡Decarbonization

The process of reducing carbon emissions, which is a significant trend in the energy sector. Sasco Limited acknowledges the importance of decarbonization but maintains that oil and gas are still critical for the economy.

💡Recapitalizing

A strategic move by Sasco Limited to restructure their finances, invest in new projects, and enhance shareholder value. This involves divesting non-core assets and focusing on high-potential opportunities.

Highlights

Introduction of Kane Marshall, Managing Director of Sasco Limited, and the purpose of the webinar.

Update on the company's operations over the last six months, focusing on the completion of the need investment.

Discussion on the company's strategic shift from international assets to a more domestic focus.

Mention of the energy crisis in the east coast of Australia and the potential opportunities in the west.

Emphasis on the importance of natural gas and oil in the current market, despite the push for renewable energy.

Kane's perspective on the role of oil and gas companies in the energy transition and decarbonization efforts.

Plans for the company to return to its founding name, Australian Oil Company Limited.

Insight into the company's view on the current commodity market in Australia and its impact on strategic initiatives.

Discussion on the challenges and opportunities in the Australian energy market, particularly in Western Australia.

Mention of the company's exploration and production activities in North America, specifically in California.

Update on the non-payments from Blue Sky Resources and the company's plans to exit the Philippines.

Plans for the company's leases in North America, focusing on rationalizing the portfolio.

Discussion on potential projects under review, including onshore and offshore opportunities in Western Australia.

Kane's views on the equity markets, energy markets, and how to strategically take advantage of geopolitical issues.

Emphasis on the importance of capitalizing the company and having the right projects in the current market environment.

Final thoughts on the potential upside for investors looking to enter the market and the company's future prospects.

Transcripts

[Music]

hello and welcome to Market open direct

connect a webinar series for companies

to tell their story why it's compelling

and why it's an opportunity to invest

I'm your host Stuart Walters and we're

joined here today by the managing

director Kane Marshall of sasco limited

ASX code SGC Kane will provide a quick

update of the company's operations and

we'll also participate in a Q&A so if

you do have any questions you could

submit them via the Q a tab at the

bottom of your screen it's now time to

introduce Our Guest Kane welcome to

direct connect morning

Stuart mate firstly um can you just give

us a a an operations update uh from the

last six months but ultimately and

probably the most important question um

we have um what can what have investors

got to look forward to over the next six

months well last six months uh we've

seen the almost the completion of the

need investment so previously we had

Assets in North America and the

Philippines so Canada California and the

Philippines we' now invested our

position in in the Philippines and

really where we are now at um you know

Mar cap three or four people looking at

10 Baggers and how they can get set in

the stock and what we're doing next so

it makes sense that you previously we've

been or still are in North America um

you know we're starting to see all

markets it's sort of responding to the

Middle East Middle East tensions of the

Israel Hezbollah um unraveling or what's

going to happen there and some

structural issues around around demand

and you know potentially a risk on

sentiment with

Trump so we seeing reasonable prices in

that commodity space so red Earth um is

an asset that's worth you know s amount

of value to our shareholders but I not

convinced that that's a place we need to

necessarily be over the next six months

um California is an energy hungry State

um it's our main undertaking of our

company um gas prices there are

currently weak um structurally markets

in that part of the world a little bit

different to

Australia um and so that probably

answers the second part of your question

is where we where we going to next now

well probably allude to this a little

bit more over the next 15 minutes but um

domestically we can see what's going on

with the energy crisis in the east coast

nobody's talking about what's happening

in West in Australia we've seen a

succession of um ambiguous Andor complex

um set of drilling results in the Perth

Basin um there's a defic deficiency in

gas supply in wa we're energy hungry and

so we're looking at opportunities that

are sort of broadening diversifying our

positions in in North America to look

more domestic um that's more focused on

natural gas but secondary to that um you

know I don't think oil should be

overlooked either particularly um you

know at some point here in Australia

we're going to be uh going to have more

tensions with China we don't have a

Reliance on our own crude um and Middle

East tensions are continue to fuel um

not only the price side but we're going

to see the supply side affected so

that's what people should look to where

we're going so it's going to be a not a

pivot per se but a broading of the

portfolio to probably more domestic

Upstream

opportunities um and rationalizing the

portfolio so that's probably where we've

been and where we're going good news

what's your view on the commodity in

Australia how do you think that impacts

upon strategic initiatives that you're

trying to implement in reinvigorating

the sasco

portfolio well seeing you know both s

sides of politics wildly opposed and no

one's really addressing the issue and

the issue is Supply supply of reliable

based low electricity and we all know

commercially that uh Renewables are

deflationary that you know typically the

internal rate of returns and and rate

returns and capex is can be um well rate

of returns much lower capex probably

just as intensive so I think

government's going have to wake up to

supply issue everyone's talking about

you know what Amo has been saying what's

going on the East Coast but no one's

really talking about what's going on the

west coast we're already seeing double

digigit uh gas prices here in um Western

Australia and no new Supply um Perth Bas

is looking a lot more complicated to

deal with that and you know I think

people forget um um that some of that

Earth Bas and cast is E mark for l& so

domestic side um energ energy markets

here are strained there's no immediate

solution represent significant

opportunity for juniors in this space um

thinking outside the box and going to

areas that have um you know had

discoveries before but not necessarily

looking for the deeper gas potential so

that's you know that's for say energy

markets I think people are long gold uh

uranium copper of course and and uh and

energy so they're the commodity spaces I

think investors are looking at certainly

I am and you know this is a perfect this

this company at this kind of end of the

market is um you know I think ideally

placed to take advantage of that and

currently the company's obviously sasco

but can you tell us more a little about

why the board is ultimately looking to

go back to the founding name of the

company yeah well I think Australian or

company limit is a good name um you know

if you Google Australian or companies I

think that would be the first one that

comes up so that that's a bit of a

no-brainer I think uh you know there's

got to be some leadership in this space

you know we're an or gas company we're

not focused on biodiesel we're not um

we're not investing in solar Farms we're

not going to invest in in wind farms

we're all in gas whether people like it

or not um that's what our business is

that's what we're quoted on the exchange

for and um it sort of gives some Clues

as to where we're going we're Australian

and we're an O and gas company it

certainly makes sense and there's also a

lot been said about the energy

transition decarbonization and Net Zero

yet here you are with a name that is

contrarian to sort of everyone uh where

everyone else is going uh what are your

views on decarbonization particularly

the investment space and the

opportunities you

see well I think everyone's in favor of

a cleaner economy but at the end of the

day um if you look at

materials and what constitutes electric

vehicles and decarbonizing economy a lot

of it's coming from fossil fuels it's

coming from the products um in terms of

Roads Wheels you know all the stuff

that's required to get this stuff out of

the ground um you know the ESG theme and

a lot of the discussion around um you

know green projects well just look

what's happening in the media now

there's been 700 jobs cut from um for

skew you know I think people starting to

realize that um it's it's not it's just

a matter of to Renewables if you don't

have if you don't have crude Supply to

just you know to deliver the materials

for a green World um it doesn't make

sense um so you know as part of that you

know oil companies are the solution

they're not they're not the enemy and I

think that's why we should embrace um

contrarian view that we're an oil and

gas company and we can actually be this

part of the solution rather than cutting

us off at the knees that's not that's

not part of the solution we've had a

question coming about the portfolio what

do you think a suitable opportunity

sasco should be targeting as Niche

opportunities within this market cap in

the Australian Capital markets well I

don't think we're saying really um

globally there are issues with uh PEX

being deployed and exploration and same

in Australia no one is coming up with

new ideas they're not coming up with um

going to basins drilling deeper for gas

um building those ideas uh promoting

those ideas bringing the capital for

those ideas there's a lot of companies

uh are really looking at sort of

stranded gas developed gas smaller pools

of gas um you know I think if you want

to be big you got to think big you got

to look at bigger opportunities um look

at where the bigger companies have have

missed things also we've seen a lot of

regulatory issues in Australia over the

last few years and a lot of the bigger

companies sort of getting probably a

little bit tired of it looking at uh

abroad PNG Alaska for example SOS um and

so they've dropped the ball in terms of

looking at those bigger opportunities

here in Australia so they're the things

we're looking at we're looking at things

um oil and gas potentially subsol helium

playes um and you know one of the few

companies that's listed in in this space

looking at looking at those sorts of

opportunities can you give us an update

on what the situation is regarding the

non-payments from Blue Sky resources

after the exit from the

Philippines yeah so I think it was back

in April or May we had the second Tran

of money for Neato that um was resulted

in nonpayment um we're trying to work

through um you know what's going on red

Earth red Earth you know um we've been

producing Circ 7 800 barrels a day um

yet we not haven't really seen much

return on that project so we're sort of

looking at ways we can extricate

ourselves from Canada um and and

basically walk away with the company

reasonably recapitalized focusing on

things that investors understand I don't

think um Philippines and and Canada have

been areas that have actually done much

in terms of value for shareholders I

think was a good idea at the time and um

and so I think part of that is trying to

amicably sort that out with blue sky um

and moving into things just getting on

with life and moving on from that

relationship and can you talk to us a

little bit about North America and the

plans you might have uh for the

company's

leases yeah so North America we've got

red Earth of course are just alluded to

and and California uh you know

California gas prices have been uh weak

weaker of late I'm not entirely sure

what's driving that obviously um

supplies are you know there's a lot of

gas supply current from Canada um LNG um

exporters can turn the Taps on um but

you know Sacramento Bas and um you know

as Gary Jeff probably talked about

before is is overlooked there are bigger

opportunities I think you if you're

looking at opportunities there they're

going to get the market excited or

swinging for the fences you've got to

look at the bigger upsides so looking at

things within the portfolio and also

adjacent to those that are a

complimentary um that you know the

market can understand shareholders

prepared to put some money into the till

all that sort or we could promote out so

that's really where we are now I think

we've got to rationalize the leases that

we've got uh I think you know red Earth

could probably be considered as non core

it's got value so we make sense to to

devest that um so I think it's more

bolt-on opportunity and then expanding

the portfolio into more domestic

opportunities another one's com in

around specific projects um on what you

can say is have you got any specific

projects under review or currently in

discussions yeah we've got a probably

about three or four projects at the

moment that we've been looking at so

it's a combination of onshore offshore

uh mostly in Western Australia um low

entry point acquisitions

things that we would pick up with our

expertise uh could bring another

like-minded Juniors and promote out so

we're well down the path of at least one

and then there's at least another

another one that we're probably Fairway

down the path with and there's another

couple we're looking at to see if theyve

really got scale when I say scale

they've got to be you know onshore you

know got to be 10 million barrels or you

know 00 BCF so we're not really looking

at things that are you know two or three

BCF onore because of the cost reg

regular cost you really got to be

looking at the big upside and um

something the punter is

like uh there's not been much more com

in but there's another one here say your

view on the equity markets um energy

markets and how you would strategically

take advantage of any geopolitical

issues yeah I think Equity Mark is kind

of tied with what's going geopolitically

I don't really need to go on about

what's happened in in uh us with Trump

but you know I think Equity markets are

risk on

um don't think there's you know he's

going to obviously want to do a deal in

Ukraine we can see the Middle East

conflict so I think it's going to be

you're going to see Equity markets

probably continue to perform to be

strong energy is a great space to be in

um you know we've suffered here for a

long time in this space particular down

the center of the market of just not

being able to raise money um get

projects mean that are that meaningful

so really um markets are strong but

they're not going to be like that

forever so it's really I think about the

next six months of getting this company

properly capitalized uh and having the

right projects and you know everyone all

the major economies are facing elections

a little bit of uncertainty but I think

um you know with Trump RIS gone um you

know we're still inflationary

inflationary mode given we're

inflationary and energy is a big

component of that um you know

governments have to do something about

energy security so it's a great time to

be sort of investing this space yeah and

just to elaborate on that a little bit

more what's what do you is the most

significant upside um for anybody

looking to come

in well the upside is why everyone

invest we capped at three and everyone's

looking for 10 Baggers and decent

projects and you know who are the board

and management to take it forward so you

know really you know when you go on the

road and you see people the first thing

they ask okay what's your market cap and

what are you doing well Market Cap's

three or four we've got some money

looking to rec capitalize the company

move new project so really on not much

news you can really easily see the stock

back in a one or two cent range um and

then you know then you get some

liquidity back in the stock it's easy to

actually do things so that's that's what

I think people be looking at is you know

if you look at Who's down this end of

the market and what they're doing there

aren't really too many you can probably

count them on one hand um and of those

who you know which of them have got

problems and I'd say I'd argue that we

don't really have that many problems

we're just you know we're in a process

of recapitalizing the getting new

projects so really you can get set now

and it's probably nothing but upside if

I'm honest okay great to hear um that's

all that's come in today so thank you to

everyone for attending today's webinar

certainly a lot of great information

there and a lot of key takeaways I'll

keep you updated for any future Direct

Connect webinar opportunities Kane

thanks for your time today I know you're

working hard in the background mate so

wishing you all the very best and look

forward to chatting again soon no

problem thanks G