Ann: Quarterly Activities and Appendix 5B June 2023, page-6

Hi @ggwill ,

I have been looking at VEN's position with regard to the AGL contract and wanted to add to your comment. Like you said the reduced revenue is due to AGL. On top of that the production costs are way over right now and VEN makes the comment that they will come down once things stabilize.

Once production is stable the AGL agreement is going to have a major influence on if/how much cash flows through. (I actually posted this on a VEN thread but then saw your and @jophda comments on the same issue)

It's hard to reverse engineer the AGL contract but there are some hints. This is my guess on what it could look like based on the little we know.

AGL deal- $15m pre-payment for 9-16PJ's through to Dec. 26 is two supply tranches. To be provided as a mix of firm and variable pricing at market rates. I assume that AGL don't want to sink VEN/MEL so they need to let some cash through and would pro-rate the production over 3 years (24-26)

The Q3/Q4 gives revenue figures that point to the JV getting around $8gj.

		Rev.	GJ	$gj
1	Q3	$292.85	35,000	$8.36
2	Q4	$179.77	23,000	$7.81

1. Two supply tranches, so one deal for the first 9pj's another for the next 7pj's.
2. The first tranche needs to pay the $15m plus interest, say 20% so $18m (so $2gj)
3. So the first tranche price could be $10gj? ($8gj cash plus $2 pre-payment)
4. The remaining 7pj's could then be at variable pricing but with a toll payable to AGL. Say $1gj?

So AGL's return for $15m pre-payment to VEN would be between $18-25m.

Pretty basic but I need something to plug into a spreadsheet!! I put this up in the hopes of getting some discussion going about the AGL deal. We know there is a deal just not what it looks like.

If you write the rest of 2023 off to get Vali and Odin up and running then 2024 starts to look OK if there is enough production. As @jophda said MEL can probably get to year end without a CR.