COE 1.14% 21.8¢ cooper energy limited

COE 2021, page-44

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    "Under the Transition Agreement, APA will make contributions to the cost of certain back-up supply arrangements in instances of production shortfalls. Cooper Energy will earn a comparable net cash margin as if all the gas had been processed at the OGPP, and a superior net cash margin to that which would occur through supply at anticipated near-term spot gas prices."

    I interpret this as

    Say Required supply =54TJ/day
    Production from Orbost =24TJ/day
    Sales price = $7/TJ
    Margin = $3/TJ

    The shortfall = 30TJ/day (54 required less 24)

    So COE needs to spot purchase 30TJ
    Spot price say = $5/TJ
    APA contributes to that purchase (it's silent on how much), say 50%

    Cost to COE to purchase is $2.50/TJ
    APA also pay COE the comparable margin of $3/TJ from above

    So basically COE earn
    $3/TJ on Orbost processed gas of 24TJ/day
    $0.5/TJ on back up purchased gas of 30TJ/day in this example
 
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