These are extracts from the strategic planning of another O&G Junior.
All good stuff packed with numbers but look at the text in Red at the end.
Maybe I don't read CTP's announcements closely enough but I get a bit frustrated when I need to look at their oppositions strategic plan to get some idea of CTP's basic economics to 1 decimal place.
"They (Gas prices) have already risen three-fold in the few years since LNG exports commenced in mid-2014. Figure 2. There are very large developed gas reserves and in Qld, predominantly committed to export markets.”
“Higher domestic gas prices may incentivise some of this to be diverted to the domestic market, and we figure >A$10/GJ is required.
In addition there is the threat of Federal Government intervention to limit export volumes. However the LNG resource owners are somewhat anxious about re-directing gas to the domestic market just yet, as many face longer term reserve uncertainty.”
“GLNG is short and needs gas from third parties, APLNG wrote-down its 2P and 3P reserves at June 30 2017, and both are increasing capital spending to develop and prove up gas despite an absence of positive cash flow from operations. We estimate that APLNG requires an average real gas price of $8.30/GJ to generate a positive ROA, while for GLNG the figure is A$9.50/GJ. Higher prices are required to pay taxes, future PRRT, interest and debt principle, and dividends to shareholders.”
“We are now in a market where gas prices ~ A$10/GJ are considered normal and we expect upward momentum to continue.
Apart from the spot prices detailed in Figure 2, there is evidence of new contracts for longer term supply being written at ~$9/GJ.”
New projects such as Cooper Energy’s Sole development offshore Victoria are disclosed to be priced in the A$7- $9/GJ range, and Central Petroleum indicates it requires $9.2-$9.7 /GJ to underpin commercialredevelopment of gas in its Palm Valley and Meerenie fields, NT.
Best regards
OGP
CTP Price at posting:
9.8¢ Sentiment: None Disclosure: Held
