Ann: Latest Company Presentation, page-11

Two points on ATP 2031 - 10 PJ/yr net to CTP would be 20 PJ/yr total which is 55 TJ/d. I can't see that rate ever being produced from the block no matter what CTP says, and I hope to God they don't try and build a plant that big because they won't fill it.

20 to 30 TJ/d is more realistic, so maybe halve that figure for CTP's net production to 5 PJ/yr. Even Senex is only aiming for 40 TJ/d from its Atlas block which is significantly higher quality than 2031, being in the permeable fairway of the Walloons, or at least on the margin of it.

Second point is I note IPL is supposedly "free carrying" the appraisal stage for CTP but I wonder what the terms of this deal are. It would be extremely generous if IPL was just gifting CTP this $20M and I would be interested to know whether there is a mechanism for them to get it back in the form of pre-paid gas (similar to the Mac deal) or via a more favourable GSA, which would reduce CTP's profit margin.

Free carries do occur in the industry but they are usually done on established acreage to reflect the previous expenditure of the owner and the risk they have taken in getting the project to that point. This is a brand new block with no previous work or risk by CTP so it does seem unusual. If it's a genuine free carry it may reflect IPL's desperation to secure gas on reasonable terms, so that they consider $20M a small price to pay to secure the supplies.

Just a couple of things to think about when it comes to valuing ATP 2031. It's a much risker block geologically than the Atlas block, it's a long way from the currently producing fields and there's a reason for that. So there's a risk to production and potentially a risk to revenue as well, depending on the fine print of the IPL deal.