Ann: Central signs 5.2 PJ pre-paid gas sale agreement-CTP.AX, page-55

The recent release of the 2018  annual report provides some timely and insightful info in relation to above:

Note 18 on page 61: "In June 2018 Macquarie Bank Limited novated its rights and obligations under the First Contract Year of the MBL Gas Sale andPrepayment Agreement, to Incitec Pivot Limited (“IPL”). This resulted in an amount of $7,865,982 being reclassified from OtherFinancial Liabilities to Deferred Revenue. The balance at 30 June 2018 represents the remaining liabilities under the Second andThird Contract Year."

This clarifies and confirms the outcome "scenario 1" per my post above which is great news - this is the greater cashflow scenario.  I imagine if we continue to supply IPL Mac would continue to take this up this option .  I also rerun the numbers and amended an apparent error in the discount rate with further info from the annual report.  Looks to be more aligned with a generous CPI rate now, which makes sense but lowers implied ex-field gas prices to c. $4.60 at Dec-18 and therefore revenue...  Updated tables below for anyone interested.

First table with rec of movements:

Second table of quasi-accounting/cashflow forecast for first year gas through NGP.

Assumptions

1. Current receipts from LTM to Jun-18. Mereenie gas price > Dingo due to oil product mix.

2. First year NGP sales at $4.55 ex-field

3. NGP production costs calculated at incremental 50% rate to account for scalability, reduced transport as sold on ex-field basis.

4. NGP other costs for scaling management, advisors etc at 20% of current cost base for LTM Jun-18.

5. Interest and principal repayments consistent at same rate as LTM Jun-18.

6. Capex from cashflow assumed proxy depreciation in costs for accounting from LTM Jun-18.  No inclusion of exploration program costs or plant upgrades.  

7. Existing contract pricing assumed higher due to transport costs in receipts. 

Cheers