COE has upgraded FY22 guidance, while also entering a critical phase as we near the finish line in terms of talks between COE and Orbost-operator APA Group. COE has lifted FY22 production and EBITDAX guidance, while reducing planned FY22 capex spend. We had expected a potential guidance upgrade given COE’s strong recent performance, leaving the new guidance inline with our existing estimates. The materiality of the outcome from the talks between COE and APA has increased the risk profile around our investment view in the short term. We maintain an Add rating with an unchanged A$0.35 target price, with all eyes remain on the advancing negotiations at Orbost.