Ann: Q2 FY21 Quarterly Activities Report, page-25

Finally got down to listening to the quarterly. There were 3 things that caught my attention (risk averse hat on):

1. They mentioned root cause was being determined by process of elimination. (This didn't exactly fill me with confidence).
However, I do believe the root cause is to get us to practical completion or 68TJ/day, whereas commercially as long as we the contractual take or pay GSA obligation of 90% of 54TJ/day (48TJ/day) we are ok. Whilst APA are making us whole for the net margin, this is as good as we could have hoped for, as it is as though we are producing 48TJ/day

2. I thought he made it quite clear that there is no further liquidated damages, and that any future agreement in relation to production is contingent on both parties agreeing to it.
COE deliver the gas, APA deliver the plant to process the gas.
COE sell gas under GSA and pay a tariff to APA.
I don't understand how commercially, COE didn't include a performance clause to cover for the risk that the plant fails nameplate capacity (I would have thought this is a risk that is borne by APA given they are delivering the plant, and receiving a tariff for it). I guess the counter argument, is APA are also taking the risk that if the plant doesn't hit nameplate capacity, they don't receive the tariff. Still, under DBOM model, build risk should have been borne by APA, and non delivery of nameplate capacity should have resulted in a pecuniary penalty.

3. Mention of refinance by March, and that the banks were in fortnightly discussions with COE, and were receiving independent expert reports in respect of technical issues. I believe this is the point that spooked the market into the sell off.
They did mention though, that the financiers were taking a portfolio approach to COEs assets.

All in all, I agree with cmon, being that 48TJ is imminent (as in the next week), but getting to nameplate may still have its challenges.

I also took the recent share price weakness as an opportunity to add to my position today.