I am fairly pleased with this strategy, subject to us not selling down any of our bread and butter (Mereenie) - I would be ok with selling down some PV / Dingo on the right terms. Previously I've posted that we need to be hissing as much gas down the NGP as possible, which in turn reduces unit costs of gas flowed. This is true whether we do this or someone else does, therefore this strategy of us farming out interests that we can't appraise on our own makes sense and commercial sense.
The idea a farmdown also looks good in light of the announcement from Armour Energy today:
- $95m farmin by STO - Including $15m upfront payment and further conditional cash payments of $15m. - $65m work program
This aligns fairly well with CTP commentary:
"Based on indicative discussions and market approaches to date, combining a sell-down of operating assets with a farmout of the CY2020 exploration programme could generate significant interest from the market and allow Central to fully fund the CY2020 exploration programme and make a substantial debt repayment."
CTP Price at posting:
18.5¢ Sentiment: Buy Disclosure: Held
