Let's take a closer look at the CSBP announcement on which Euroz...

Let's take a closer look at the CSBP announcement on which Euroz have based their price target increase :



Oh, sorry that was the announcement from back in August 2020, suggesting the fixed price was better than whatever went before in the option agreement. This following is the new reality for 1 July 2024:



Consider the following carefully chosen phrases from this latest epic from Strike:

1 "on Strike's assessment" = it's an externally unverified opinion

2. "more closely aligned to current WA market prices" - treat WA MP as A, GSA price as B and option price as C, then if A is $7.00gj, if B is $3.50gj and if C is $4.20gj, it follows logically that C is more closely aligned to A than is B. (all prices picked as random hypotheses). NOTE this does NOT mean C has
to be anywhere close to A.

Weasel words I fear, this announcement, designed to obscure the fact that the original option price may not be all that great in absolute terms albeit ok in relative terms.

3. "long term gas supply" = Not spot. Long term contracts are typically well below spot. It's hard to get much useful data on long term prices other than the fact that long term contracts are typically well below spot.

You can see why long term prices are likely to be materially lower from the spot market history:



The price peaked late 2023/early 2024 but is on its way down again. So, the option price might be quite a lot under current market price. Is $7 fair as Euroz suggest? We don't know as no-one except Strike and CSBP know how the option price is defined. I do note that in 2020 when the option was converted, the price was at a real low of around $2.20gj. Pretty smart move by CSBP.