NEW GAS SALES AGREEMENT AND FINANCE FACILITY EXTENSION

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    Central Petroleum Limited (ASX:CTP) (“Company” or “Central”) has signed agreements for
    the sale of 3.5 PJ of gas and a 12-month extension to its existing finance facility with Macquarie
    Bank Limited (“Macquarie”).
    Highlights
    • Central to supply 3.5 Petajoules (PJ) of gas to Macquarie (or its nominee) over calendar
    years 2022 and 2023.
    • The gas supply agreement is to be pre-paid in full in December 2020.
    • Funding from the gas supply agreement will be used for the recompletion of four existing
    wells and drilling two new crestal production wells at the Mereenie Field in 2021.
    • The programme is expected to return the Mereenie Field’s gross JV gas production
    capacity to over 45 Terajoules per day (TJ/d) when completed next year, delivering a
    target total volume in the order of 40 PJ (20PJ net to Central).
    • The term of Central’s existing $69.8 million finance facility with Macquarie has been
    extended by 12 months, with the new maturity date now 30 September 2022.
    These transactions will accomplish a series of important corporate objectives for Central,
    which:
    i. Funds critical Mereenie field activity to increase production capacity back to above a
    target plateau of 45 TJ/d (gross JV);
    ii. Significantly increases target production capacity (net of the new gas supply
    agreement) for marketing into a domestic gas market recovery from 2022;
    iii. Reduces gas contracting uncertainty by removing an existing Macquarie option to
    purchase gas in 2022 and 2023.
    iv. Demonstrates strength in the domestic gas market from 2022;
    v. Preserves firm contracting capacity for delivery through the proposed Amadeus to
    Moomba Gas Pipeline (“AMGP”) from 2024;
    vi. Mitigates refinancing risk and increases capital structure certainty through to late
    2022; and
    vii. Creates cash flow flexibility through 2021 under a restructured debt repayment
    profile.
    ASX ANNOUNCEMENT AND MEDIA RELEASE – CENTRAL PETROLEUM LIMITED Page 2
    New Gas Sale Agreement
    Under the gas sale agreement, Central will, subject to certain conditions precedent having
    been met, be paid in advance for the gas as a lump sum on 15 December 2020 and supply
    3.5 PJ of gas to Macquarie (or its nominee) over calendar years 2022 and 2023. The gas sale
    agreement removes Macquarie’s existing option to purchase additional gas in 2022 and 2023
    under the Gas Sales and Prepayment Agreement announced in May 2016 in which 5.2 PJ of
    gas was sold for delivery over CY2019, 2020 and 2021. The new gas sale agreement will
    essentially continue gas deliveries to Macquarie (or its nominee) at the same rate for a further
    2 years (CY2022 and 2023).
    The new gas sale agreement increases Central’s firm contracted gas sales to 7.5 PJ in
    CY2022 and 5.2 PJ in CY2023 (refer figure 1 below), demonstrating strength in the term gas
    market from 2022 whilst preserving Central’s firm contracting capacity for deliveries through
    the proposed AMGP from 2024.
    Figure 1:
    The funds for the gas that are paid in advance will be used by Central to fund its share of costs
    associated with recompleting four existing wells to produce gas currently behind pipe and
    drilling two new crestal production wells at the Mereenie Field in 2021.
    The programme, which is subject to final JV approval, is expected to return the Mereenie
    Field’s gross JV gas production capacity to over 45 TJ/d when completed next year, delivering
    a total incremental volume in the order of 40 PJ (20 PJ net to Central). The increased
    production capacity resulting from this investment will increase the quantity of firm gas
    available for marketing from 2022, including into markets potentially accessible via the
    proposed AMGP from 2024.
    ASX ANNOUNCEMENT AND MEDIA RELEASE – CENTRAL PETROLEUM LIMITED Page 3
    Loan Facility Extension
    Central and Macquarie have agreed to extend the term of Central’s $69.8 million finance
    facility for a further 12 months. Subject to certain conditions precedent having been met, the
    facility will mature on 30 September 2022. There is no change to facility pricing and the finance
    facility will have a restructured repayment profile which continues repayments at $1M/quarter
    for the next four quarters, increasing to $2M/quarter on and from 31 December 2021 through
    to the end of the facility term in September 2022. The restructured debt service profile will
    provide additional cash flow flexibility for Central as it pursues its various growth strategies.
    CEO Comments
    “The transactions announced today pave the way for our strong financial performance as we
    emerge from the current market downturn. Using a pre-sale structure to fund field drilling that
    unlocks significantly more gas production capacity from 2022 accomplishes several key
    corporate objectives. Combined with the extension of our cost-efficient finance facility to late
    2022, these transactions give Central flexibility and a solid financial base as we move forward
    in progressing our growth activities.”
    -ends

    courtesy of Bell Direct
    ===================================================================================

    DYOR

    i do not hold this share

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    What price is prepayment at ? Current long term price net to CTP is about AU$5.50. Prepayment suggests some benefit to Macquarie which is probably discount to market ? At yearly supply rate 1.73 PJ at market AU$5.50 net to CTP is AU$ 9,515,000 a year. Up front payment is AU$19,030,000. Useful cash for CTP but doesn't justify todays 13.6 % rise in share price.

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  3. 170
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    Down 8 % - net change since announcement 5.6 %. Patient may be able to re-enter at 10 cents during long market hibernation over X-mas New Year until professionals return February 2021 - unless there is news before then of genuine new GSA or some other real news.

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    26 October 2020
    RESIGNATION OF DIRECTOR
    Central Petroleum Limited (ASX:CTP) (“Company” or “Central”) wishes to congratulate one
    of its Non-Executive Directors, Dr Julian Fowles, in being appointed Chief Executive Officer
    and Managing Director of Karoon Energy Limited. Dr Fowles advises that it is a requirement
    of his appointment that he resigns all of his non-executive directorships, including with Central,
    in order to focus on his new role. The effective date of his resignation is 31 October 2020.
    Central’s Chair, Mr Wrix Gasteen, said “Dr Fowles has been a valuable and effective Board
    member and brought particular expertise and experience in exploration and development to
    Central. In addition, his appointment in June 2019 was a strong endorsement of the
    Company's strategy and growth potential, and came at a time of significant change for
    Central.”
    “On behalf of all Central Board members, I wish Julian all the best in his new role and thank
    him for his contribution to Central.”
    -endsThis ASX announcement was approved and authorised for release by Wrixon Gasteen, Chair of Central

    where was the congratulatory announcement when Cottee left ?

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  5. 72.2k
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    sent privately between long-suffering CTP shareholders

    https://www.youtube.com/watch?v=cGJ_IyFwieY

    this probably would have been a party favourite .. LOL

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    maybe that's why LD has hire outside legal counsel...

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    Chairman Cottee, always causing problems, .... no matter where he turns up;

    Mongolia replacing Australia as coal provider
    Last month China told some of its state-owned steelmakers and coal-fired power plants to stop importing Australian coal with immediate effect.

    Among the utilities given instructions to look elsewhere for thermal coal were Huaneng Power International, Datang International Power Generation and Zhejiang Electric Power.

    It has been reported by the South China Morning Post this week that Chinese steel mills and power stations have started buying more coal from Mongolia after Beijing imposed a ban on imports from Australia.

    Coal from Mongolia, which borders China to the north, is the most obvious replacement for Australian coal, the paper reported.

    It is also being reported that some Australian winemakers have now suspended shipments to China fearing that they will not be allowed entry.

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  8. 170
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    CTP is about to have its 3rd Chair since Cottee took garden leave. My guess is it will occur somewhere around June. Current Chair has agreed to go. I expect mick McCormack will be new Chair after his orientation / probation is up.

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    Rumours on the office bush telegraph are that LD has retained criminal defense counsel. Mind you, those are just rumours. No idea what could be going on.

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    but isn't the CTP board the doyen of transparency

    that is what ASIC and ASX profess to enforce

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    CTP to receive AU$19 million ( exact amount undisclosed ) cash From Macquarie December. Takes cash on hand to around AU46 million. Let drilling begin !

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  12. 170
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    Range is the priority for both CTP and Incitec right now. With Macquarie pre-payment December CTP can accelerate Range development at every opportunity getting reserves doubled, production on-line, cash coming in, and share price up ( before making a new issue ? ).

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