COE 4.44% 21.5¢ cooper energy limited

COE 2021, page-44

  1. 4,772 Posts.
    lightbulb Created with Sketch. 1241
    "Under the Transition Agreement, APA will make contributions to the cost of certain back-up supply arrangements in instances of production shortfalls. Cooper Energy will earn a comparable net cash margin as if all the gas had been processed at the OGPP, and a superior net cash margin to that which would occur through supply at anticipated near-term spot gas prices."

    I interpret this as

    Say Required supply =54TJ/day
    Production from Orbost =24TJ/day
    Sales price = $7/TJ
    Margin = $3/TJ

    The shortfall = 30TJ/day (54 required less 24)

    So COE needs to spot purchase 30TJ
    Spot price say = $5/TJ
    APA contributes to that purchase (it's silent on how much), say 50%

    Cost to COE to purchase is $2.50/TJ
    APA also pay COE the comparable margin of $3/TJ from above

    So basically COE earn
    $3/TJ on Orbost processed gas of 24TJ/day
    $0.5/TJ on back up purchased gas of 30TJ/day in this example
 
watchlist Created with Sketch. Add COE (ASX) to my watchlist
arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.