The report at least represents a start of giving shareholders a picture of CTP “On the back of a cigarette packet” which is what we really need.
I am a typical investor trying to figure out if CTP at today’s price is a good medium term investment opportunity or weather the share price will slide further.
Don’t want to base my decisions carrots on sticks against a blue sky background, tired graphics slides or entertaining quips.
I just want CTP to present a simple business strategy & Project Management Plan to show me hoe CTP can make between say $30M and $50M per annum without further shareholder dilution and with minimal risk of being taken over and I am sure the market is capable of doing their own calculations from there….
“Once a strategic plan becomes “3 dimensional” the chances of failure increase markedly.”
I just want to see a simple “1 dimensional” (Linear) plan for each gas field with plausible budget dollars attached to each step.
I am not trying to be an expert here but I have put a lot of work into this and am very pleased that CTP are starting to release the sort of information that stops people (Like me) from making wild and inaccurate assertions.
For what they are worth my comments in bold italics.
CTP’s position(About page 7).
Brown Field Development with 70TJ/day existing plant with NGP having
60TJ/daycapacity available in late 2018.
To assist readers Link Montage from my previous post.
The 60 TJ/day flows down the Carpentaria pipeline,I am pleased to say, is now acknowledged & given the risks to APA outlined in my previous APA post I can’t see much appetite on their part for increasing its capacity so my guess is that this limitation will remain for say 2-3 years.
Not the end of the world CTP can still work with this & provide increased value to shareholders.
If drilling confirms prognosis and pipeline reforms synergistic with reforms delivered at around $5/GJ to Sydney.
on “uncovered” pipeline, Mereenie Gas (including ex‐field costs) can be
Sounds OK but his was what the chairman was saying not so long ago.
From the second Supplementary Scheme Booklet Letter from Chairman 14 June 2017
“the significant reductions in pipeline tariffs sought by Central will not be achieved;
long term uncontracted gas prices (on a real, ex-field basis which takes in to account the cost of transporting gas from Central’s assets to the East Coast) will be below the $4.00 to $4.50 range used by the Ernst & Young Transaction Advisory Services Limited”
I wouldn’t mind running a book on AGL deciding to build the Crib Point Gas Import terminal which, having the ability to bid on stranded LNG cargos at sea could be quite a game changer.
If they are prepared to come up with funds this looks like a pretty good medium term solution.
I doubt whether it will be worth having a slouch with APA to get a better price on the paltry 60TJ/day available in the Carpentaria pipeline. Regulation will probably target the larger pipelines from Curtiss Island.
In any case if they end up taking reduced haulage costs out of APOA’s hide then my guess is that unless these are passed onto consumers rather than gas producers that there will be an uproar.
Price will be long term $8‐$10/GJ citygate.
Seems to be generally accepted around the traps.
Short list of what I I would also like to see…
CTP budgeted Cost of production ex field. Ideally split by gas field.
Expected production depletion curve for Mereenie. (If I recall West Mereenie 15 is only flowing at 1.1 TJ/day)
Cost of bringing Mereenie surface facilities up to 70 TJ/day.
Rough estimate of facilities costs for Palm Valley, Dingo & Ooraminna.
Budget for cost of extra well at Dingo if needed.
Milestones – CTP is perfectly positioned Strategy…
Many years of driving projects have taught me to instinctively uncouple interdependencies wherever possible and if an insurmountable barrier is encountered to get everything else off the critical path leaving it exposed ready to attack usually with dollars but with much reduced risk.
In our case IMO, the key execution objective should be to make the execution strategies for Mereenie, Palm Valley, Dingo & Ooraminna as independent as possible so that problems with one will not impact on the others giving us 4 independent paths to early monetisation.
I think we should seriously consider drilling Ooraminna and Palm Valley as soon as possible to allow the maximum time for construction & commissioning of surface facilities to capture every possible TJ of the 60 available when the NGP is ready. In any case a transparent evaluation of the pros and cons here supporting CTP’s strategy would do a lot for shareholder confidence.
In the event that the margins for East coast gas sales increase there is still an increasing risk that Blacktip gas would be competitive & they, of course could fill the NGP at the drop of a hat.
The current milestone plan just doesn’t have enough detail to convince me that CTP is really serious about its timely execution and concerns start to creep in…. Sorry folks but I am just telling it like I see it.
I would like to see a reasonably detailed MSP plan with $ on it.
Fellow shareholders the other side of this request is that we should not pillage or hang draw and quarter CTP for the plan either needing to change of not ultimately being achieved.
The focus always needs to be on the best and cheapest path to getting gas down the NGP and turning it into $$$$.
Like to see…
A more detailed Project Management Strategy &Time Plan
Best Regards
OGP
CTP Price at posting:
9.7¢ Sentiment: None Disclosure: Held
