Justin – many thanks kindwords indeed – we should find out more about the tie in of PV13 and its currentflow rates plus much other news when we get Oct – Dec Quarterly Activitiesreport due next week i.e by 31 Jan 2019. (Note the 5 Oct 2018 initial flowannouncement ‘ PV 13 Encounters Strong Gas Flows’ from PV13 was very positivetesting 13.6 mmscfd). CTP Management have said the Northern Gas Pipeline NGP is‘transformative’ and with Gas Acceleration Program GAP that was also due to becompleted by end 2018 should indeed IMHO make CTP VERY transformative. I hopewe should see starting a positive and growing cash flow/profitability from thisquarter Jan – March 2019 however given that we probably get paid 30 days aftergas delivery its possible it will be 2nd quarter before we have afull quarter of NGP & GAP benefit.
Yes I agree Feral a growing cash-flow and profitability is indeed the key, Ithink though few investors realize how cash generative CTP could now becomeafter completion of GAP and NGP projects that why I mentioned the need to do abetter job of more clearly defining and announcing exactly how transformativeboth NGP and GAP will be. Even Management seem to recognize this and in the Nov2018 AGM presentation (see below page from Nov AGM 2019 presentation) howeversaying doing are two different things. While like you I also prefer to let thenumbers do the talking, a good story should be told and told often especiallyafter years of CTP losses and credit raises – it takes good numbers, time, awell laid out vision and positive announcements/ PR to change the negativeperception of many prior years.
I agree I think we now have the Chairman, BOD and Management to start to makethat transformation from ‘troubled’ company to hopefully stock market darling.I actually view CTP now as a defensive stock being domestic Australia gas salesi.e production of fertilizer needed for domestic agriculture so somewhat immuneto global downturns/trade tensions etc.It would be great toeventually see a shareholder dividend which I believe would increaseinstitutional investors. We just have to make sure management use the comingcash-flow and profits to pay down debt and pay a dividend and not blow it on aany unsuccessful future projects. (Note Nov 2018 AGM presentation also includedunder.
‘Other Key Strategies Reduce our current level of debt (-50% D/EV1) Use CY2019 freecash flow to repay A$22 million in debt (23% reduction)
2) Use new equity tofund growth”
mmmm ? – not sure I like the idea of new equity / dilution it depends on the project and certainty of success ie is it really value add.
To see how transformational I believe the future might be, in year ending Sept 30 2018 (see AGM Nov 2018 CTP Presentation CTP sold 5TJ/d of LPG. This year to Sept 30 2019 they say they expect to triple sales i.e 15TJ/d. However with gas compression they seem to state they should be able to increase LPG from 20TJ/d to 80TJ/d. It would be good to better understand when and how the gas compression capability to 80TJ/d will take place and I will be asking management for an explanation and an idea of timing on this and let people know if and I receive a reply and copy them when I get an answer.
Note the GAP project which should have been completed by end of year (see Sept-Dec 2018 Quarterly Activities Report) is design to get us close to TJ80/d of LPG in fact from what I can figure out TJ72TJ/d . I quote‘The MereenieUpgrade Project is aiming to increase the capacity of the facilities to deliver44 TJ/day of firm sales gas Phase 1, with a further 13TJ/d of sales gascapacity Phase 2 subject to mitigating pipeline constraints. The Projectreached some important milestones during the quarter as engineering andprocurement activities were largely completed. Civil works for new equipmentwere also completed.
At PalmValley work continues on the restart and optimisation project to deliver 15TJ/day of sales gas. During the quarter, works included integrity reviews andmajor overhauls of compressors.’
So 44 + 13 + 15 TJ/d = 72TJ/d – it would have been nice to have seen a very positive ASX announcement on progress and /or completion of CAP – a missed opportunity, a good story should be told as often as possible.
The question is if the capability is to produce TJ/72 per day and we are only expecting to sell in the year to 30 Sept 2019 avg 15- maybe 20TJ per day – when is the difference coming on line and when and how will it be sold – perhaps we are waiting for compression or allocation within the NGP. Again I will ask Management and if I get a reply I will post it here
In summary Feral I agree hopefully with NGP & GAP now finished and with significant growing gas sales plus with Durkas with Santos being ‘free carry’ no cost well – (Santos now 70% CTP 30% per phase 3 of Farm out Agreement), and ATP 2031 covered by the A$20 million exploration investment fromIncitec Pivot Ltd IPL 50/50 JV the largest expenses should be behind us an we should hopefully in 2019 (year end Sept 30 2019) see the first healthy profit for CTP in years. Lets hope so.
