A note of caution on considering the extra sales via NGP as free cash flow.
CTP owes PWC gas under the take-or-pay contract. This is currently recognised in the accounts as deferred revenue (AR Note 15). $2.7m worth is due within 12 months and another $10.3m after 12 months. PWC has on-sold this gas and will receive the revenues,
CTP has over lifted $3.5m in Mereenie gas from JV partner MBL (AR Note 17e) and this will have to be rebalanced, probably in this CY.
MBL novated to IPL its entitlement to Mereene gas owed to it by CTP (AR Note 18) of $15m.
The last Quarterly reveals CTP was advanced $5m by IPL against future gas deliveries, used to finance engineering works.
CTP owes MBL $74m (AR Note 16b) which it is repaying at $1m a quarter plus interest. The facility matures 30 Sept 2020 (AR Note 32e) and the last Quarterly notes it intends to refinance this CY.
CTP also has FY19 exploration commitments of $14m (AR Note 30b) some of which has already been expended,
This year, CTP will unwind the deferred revenues on the balance sheet, significantly improving its financial position, but cashflow and pocketable revenues will be very thin.
This is why I have been so anxious to see big early volumes to NGP - because it matters and the faster CTP can clean up its balance sheet, the sooner it gains its freedom. Please feel free to dispute my analysis.
Ash
CTP Price at posting:
14.0¢ Sentiment: Buy Disclosure: Held
