CTP (ASX) CTP Share Value Sensitivity Analysis?

Originally posted by OilGasPlanning ↑

This post does not contain investment advice DYOR before making any investment decisions.

It started off as a working document for my own reference and I have decided to share it in the hope that other CTP shareholders may gain some benefit by using it as a framework for their own research.

This document is not intended to influence the share price because shareholders should do their own research so I have attempted to provide either links or page numbers to source documents wherever practical.

Summary

Central is now competing with a number of other gas centric low cap juniors whose share prices over the last 12 months have increased significantly in response to business strategies designed to take advantage of the East Coast Gas Shortage.

This is in spite of the fact that these O&G juniors are not in Central’s enviable position of already being a marginally profitable producer with construction of the pipeline to market well under way.

If the prognosis behind the appraisal program is successful, it will result in a significant increase in the (Net to Central) 2P reserves to between 352.9 to 541.4 PJ and establish horizontal drilling technology as an economically sustainable gas extraction method.

My view after doing the research described in much more detail in the attached PDF is that, whilst there are no guarantees, that the horizontal drilling appraisal initiative has a pretty good chance of establishing commercial deliverability.

The gas is there we just have to optimise the extraction technique.

It has been a tough journey but now have a business plan that gives us a fighting chance of earning something like 30M/year, as long as we can achieve our 30TJ/day share of the spare NGP capacity.

The expert submissions contained in the SOA document have established a new benchmark for the standard of communication that CTP shareholders now require from the CTP board and management.

Effective communication to the broad base of shareholders is vital to maintaining market sentiment.

The potential share value from spread sheet model below is surprisingly sensitive to the market’s perception of CTP’s P/E ratio.

In order to maximise shareholder value all variables in the CTP model have to be carefully managed and de-risked with the objective of the drilling result being the last man standing.

To assure shareholders the CTP business plan between now and first gas down the NGP needs to be presented in much more detail, a lot more Information Flow Headings are needed.

I have created a simplified spread sheet model that would allow me to enter global variables for the major factors that impact on the CTP share price and I must admit the results really surprised me.

The model allowed me to look at Central’s business from a number of perspectives. The attached PDF deals with them in considerable detail and is supported by extensive references to sources of information with associated hot links.

The recent CTP report for the quarter ended 30 June report states:-

“Out of the SOA two major benefits accrued, namely:

A fully informed and reputable company valued the Company at over 20 cents per share; and

An Independent Expert, taking into account a $42 million capital requirement, valued the

Company shares in the range of 15 to 20.5 cents per share on a controlling interest basis.
Under both these matrixes the Company’s shares remain significantly undervalued leading over time to a pathway to share price accretion once shareholder instability subsides.”

The following screen shot taken from the Sensitivity Model appears to support the above comment.

The global variables are set at a modest pipeline reform of 15%, excluding Amadeus and Carpentaria and a plausible cost of production at $1.50/GJ at the CTP site gate. It includes haulage costs to Sydney city gate and a net to CTP production rate of 25.3 J/day to CTP to account for the supply 4.7 TJ/day to service the prepaid MAC delivery.

View attachment 819405

Put simply, main CTP objective is to have enough gas ready to fill NGP1 on the day it is open for business late 2018.

Best regards as always

OGP
View attachment 819450

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Congratulations O & GP. Impressive effort. You have set a standard for posts few will be able to replicate. " Never have so many owed so much to so few ". ( if thats from Churchill CTP M.D. will appreciate it ). Your archeology / forensic analysis has unearthed a series of matters requiring attention and explanation from CTP. I leave geological and engineering comment to others. Your points : 1. SOA set benchmark for standard of communication ctical to be maintained by recurring CTP reports : & 2. systematic sustained recurring business plan details necessary from CTP, are fundamental and essential to underpin fragile-wary investor engagement. Your generosity with this post is phenomenal.

No.	Vol.	Price($)
3	325000	5.0¢

No.

Vol.

Price($)

325000

5.0¢

Price($)	Vol.	No.
5.2¢	8461	1

Price($)

Vol.

No.

5.2¢

8461

No.	Vol.	Price($)
1	55500	0.135
9	1167237	0.130
8	593133	0.125
19	902443	0.120
1	86000	0.115

No.

Vol.

Price($)

55500

0.135

1167237

0.130

593133

0.125

902443

0.120

86000

0.115

Price($)	Vol.	No.
0.140	787079	9
0.145	1062465	10
0.150	344400	6
0.160	125481	8
0.165	497623	5

Price($)

Vol.

No.

0.140

787079

0.145

1062465

0.150

344400

0.160

125481

0.165

497623

(20min delay)
Last 5.2¢		Change 0.000(0.00%)		Mkt cap ! $37.74M

Open	High	Low	Value	Volume
5.2¢	5.2¢	5.2¢	$25.62K	492.7K

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