This looks like a really good result. It was pretty obvious that...

This looks like a really good result. It was pretty obvious that the NTG was going to be the main customer with the demise of Blacktip and the almost complete lack of other sources of domestic gas locally with the exception of diversions from Ichthys LNG.

The cost of shipping gas from the Amadeus to the East Coast ex-Wallumbilla was around $5/GJ and even to get it to users in the Mt Isa region was at least $3/GJ, possibly more depending on how much of the Carpentaria pipeline toll they were paying.

The cost of shipping gas domestically within the NT is just the cost of the Amadeus Gas Pipeline which is something like 45c/GJ from memory. In other words, CTP could sell gas to the NTG for $4/GJ less and still come out ahead.

As predicted, ARU need to extend to the end of 2024. Bad luck for them, but luckily the desperate NTG will take anything we can produce.

I've basically given up holding hope for any greenfield exploration. It's pretty clear that under LD the company is a low-risk appetite entity that will prioritise cashflow from operations and the focus of what little drilling they do will be on appraisal to keep the plants full. Nothing wrong or right about it, it's just a different risk profile, but I do agree that if they're going to pursue that strategy then the only way to build shareholder value (or more accurately, restore so much lost shareholder value) is going to be through shareholder returns.

We should see increased cashflow the next few years from good prices, low transportation costs, and then end of delivery of pre-sold gas. If the helium plant comes off that is basically an extra revenue stream with no cost to CTP too. Helium pricing is pretty opaque from what I can but seems to be around US$450/Mcf which is more than A$650/Mcf. If they produce the full 60 Mcf/d that's gross revenue of around A$14M pa. CTP only gets 1/8th of that which is $1.7M pa. I've no idea how much of that will be profit but I note that the operating profit must be pretty high because Twin Peaks are funding the plant, so they need to pay off 100% of the capital cost through depreciation on top of the operating costs. The Mereenie JV doesn't have the capital costs, or really any additional costs, so that should be a very healthy profit margin.

So if Twin Peaks commit to the plant, that means they see a good return INCLUDING the capex costs - which implies a very good return for the Mereenie JV.