O&Ginvestor
The following is just my own personal opinion and is not investment advice and is based largely on a presentation with caveats which stresses that it is not complete and not intended for prospective investors.
Your comment…
“Page 3 of the 21March2018 Presentation (Rock me Amadeus) notes the Mereenie upgrade was aiming for work completion by end of year of a capacity increase to 63 TJ/d (CTP share 31.5TJ/day). The story now is that by end of year (Phase 1) the Mereenie upgrade will only deliver 22 TJ/day (8.03PJ/yr). What happened to the 9.5TJ/day (3.5PJ/year ) of Mereenie capacity?? This is not small change, and assuming we only get $6/GJ that’s still $20m/year. Note this is “plant capacity” only, and shouldn’t be dependent on drilling results.”
- As I understand it the phrase “potential lateral augmentation” mentioned in the latest presentation is referring to the fact that the Mereenie Spurline (Which has been around for about 30 years or more) has a maximum nameplate capacity of 42 TJ/day. Hence the limitation on Mereenie production.
I would have thought that this would have been picked up by CTP/MAC in their due diligence prior to purchasing the Mereenie asset.
The following public APA document “Amadeus Gas pipeline Asset Management Plan FY2016-2020” gives an insight into the issues that arise in maintaining the Amadeus pipeline system.
- Getting the best out of an ageing facility such as Mereenie is almost a black art and my experience has been that there are not too many people around with the background and mindset to do it economically and successfully.
My own approach to Mereenie would be to accept the pipeline limitation of 42 TJ/day and tune the site processing facilities to this throughput rather than trying to attempt to drive an old brownfields plant that on 50 shades of brown is well towards the iron oxide end of the operational palate.
- This of course would mean that CTP would only have about 18 TJ/day of Mereenie revenue gas (Plus Associated condensate from 22 TJ/day) after they had supplied the presold 4.7 TJ/day to MAC.
On the back of a cigarette packet..
- Dingo can look after itself and supply its 4.3 TJ/day to Brewer Estate.
- Palm valley (Post Upgrade) 15 TJ/day capacity with 13 TJ/day sold to Existing NT Contracts (Taken from Rock me Amadeus Presentation) which may leave say 2 TJ/day to add to the 18 TJ/day above to give IPL the 20 TJ/day they are talking about.
- By the time we pay for facilities and field development cost, interest increased management overheads and staff costs Etc. the NT gas sales will run somewhere near break even if we are lucky.
- This leaves 20 TJ/day sold to IPL which after amortisation IMO will be lucky to make $3.00/GJ IE somewhere near $20M per year.
- If we add the upside say 10 PJ/year from the CTP net half share of ATP 2031 at say $3.00/GJ we only get $30M/year additional notional profit.
- Do your own calc. on spreading this around 700M shares to figure what the show is worth.
- Put simply, whole Mereenie, Palm Valley, Dingo purchase looks to me like it has been well and truly overtaken by the relatively small ATP 2031 CSG development equivalent in area to less than 10 KM X 10 KM.
The above may be way off the mark and my preferred alternative would be for CTP to plausibly and simply document their field-development, operational, amortisation and stakeholder management strategies Etc.
I was disappointed when at the last webinar I seemed to gain the impression that shareholders communication would be limited to legal requirements or words to that effect.
I sincerely hope that the management of the new Chairman that the CTP board will deliver much needed communication to shareholders.
Regards
OGP
