Good to see more coverage, but a few anomalies to me:
1. MQ prepaid gas isn't reflected in working capital movement, which will lift cashflow by c$7-8m from CY22. They model cashflow of c$20m per year, which management indicated is what they would expect net of self sustaining capex on a go forward basis....however, once the liabilities unwind, i would expect there to be a step change in cashflow to reflect.
2. Overlift repayments to MQ commencing this year / next year. I thought Leon detailed that overlift didn't need to be repaid until the end of the field life. I wonder why it is modeled that we would repay it early?
3. No retirement provision in the field.
4. Assumes steady state production with same levels of sustaining capex until the end of field life.
5. CY2020 exploration program simply adds $0.04 per share. I would like to have also seen a sell down scenario which would have shown:
- Cash injection from reserves sell down on comparable 2P / 2C metrics
- Risked exploration program success on a net % equity basis
This was a good opportunity for state one to dig deep and produce a report with some detailed information and value through multiple variations (i.e. sum of parts, dcf, comparatives). In the end, it just looks a little weak and CTP probably shouldn't have allowed it on their website.
Did they even interview management?
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