COE 2021, page-47

Hi @Proga

You pose an interesting question

COE said
"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."

So does the bolded mean

• COE earns $3/TJ on all gas (net of their contribution to purchase gas)
• COE earns $3/TJ on all gas (less their contribution to purchase spot gas)

The wording is ambiguous, and you could well be right. It could be the former which would be great as it means no earnings loss and circa $15M per quarter (based on my assumptions) irrespective of production.

My view only (hope I'm wrong) is that it's the latter. It also means any contribution by COE to purchase spot gas should really be disclosed to market participants.

I'd claim "Orbust" but I'd invested a bit after COE stated that the plant works were completed as I was expecting stepped changes to earnings (which could be occurring depending on how you interpret that bolded bit)...