Sales price on the east coast should be around $8 contract IMO, maybe a bit more depending on how desperate IPL were at the time, but that's nowhere near the net margin flowing through to free cash. This isn't like a software company selling digital downloads with effectively zero marginal cost. You need to subtract opex which CTP has forecast will be around $1.50/GJ when the three plants are producing at full capacity. Then the pipeline tolls which depend on what backhaul arrangements they have (and which we don't currently know). If they only have to pay to get it to Isa it will be a bit over $3/GJ, if they have to get it to Wallumbilla (which is where spot sales are delivered) then it will be more like $5/GJ.
So that will make your EBITDA figure more realistic. Then as I said there is the interest and D&A required to pay off the acquisition cost of the three fields plus the money spent on upgrading them to deliver into the NGP, including the drilling of wells. I haven't done any more than back-of-envelope calculations on this because I don't have a good handle on the inputs (due to big unknowns like the backhaul arrangements) so I don't bother putting too much effort into DCF calculations, etc. I'll wait for CTP's first full half year of NGP production and see what the bottom line numbers look like.
Long story short, yes I think your free cash calculation is too high and I think you are also underestimating how much the EBITDA figure will shrink to an NPAT. When I said I thought $40M was reasonable that was after Stage 2 upgrades where CTP will be (hopefully) putting 40 TJ/d net through the NGP.
Ashentegra's points about pre-sold gas etc are also relevant but are one-off items that should hopefully be mostly restricted to this year's results. Although when you are only talking about a 6 year reserves life, I suppose you can't just assume they are negligible in NPV terms - the analysts working for the big boys would be factoring it into their calculations of CTP's NPV and thus its fair value share price. That's not something I have tried to quantify though, and I have a comparatively small holding in CTP mostly for interest's sake (I am a geologist interested in the Amadeus basin) and don't have the time, energy, or financial expertise to bother!
The long and short of it is that CTP really needs more gas to sell to justify a significantly higher share price, say anything much above 25c.
