Cooper takes FID on Sole

05 April 2017, Week 13 Issue 559

Cooper Energy is targeting a slice of the tight gas market in southeast Australia after clearing an FID for its wholly owned Sole gas field on March 29.

The Sydney-listed firm followed that announcement up with a A$151 million (US$114.8 million) equity raising that should cover roughly 40% of Sole’s A$355 million (US$270 million) price tag.

The move has already banked A$116 million (US$88.2 million) raised from 150 million shares offered for A$0.315 (US$0.24) apiece and a placement of “accelerated non-renounceable” entitlements to institutional investors.

Another A$35 million (US$26.6 million) is still to be raised through the retail component of Cooper’s entitlement scheme, while Sole’s remaining budget of around A$204 million (US$155.2 million) will be sourced from debt markets during the quarter ending June 30.

Sole, which is situated in the Gippsland Basin offshore Victoria, is expected to add 43 million boe to Cooper’s proven and probable (2P) reserve base, representing a 370% increase on the 11.6 million boe reported on January 1.

Upon first gas in early 2019, Sole will be connected to the proposed 2.4 mcm per day Orbost treatment plant, which is to be funded by pipe operator APA under a A$250 million (US$190.1 million) deal provisionally signed with Cooper in February.

Cooper’s eastern Australian bet looks strong given an anticipated crunch for gas supplies across the East Coast from 2018 onwards.

On March 1, Cooper completed its strategic realignment by announcing the disposal of its last Indonesian asset and the closure of its Tunisian operations.

Sole is slated to lift Cooper’s output to around 6 million boe (16,438 boepd) during its first year of operations, from the 1 million boe (2,739 boepd) projected for the current fiscal year.

Cooper bought former partner Santos’ share in the project as part of an up to A$82 million (US$62.3 million) deal signed for all of Santos assets in Victoria in October 2016.

Cooper has signed annual offtake contracts with AGL for 12 PJ (312.58 mcm), Energy Australia for 5 PJ (130.24 mcm), Alinta Energy for 2 PJ (52.1 mcm) and O-I Australia for 1 PJ (26.05 mcm). Together these should absorb roughly 20 PJ (520.97 mcm) of Sole’s 25 PJ (651.21 mcm) plateau output in 2021-28, assuming its partners exercise renewal options in 2024.

Cooper plans to sell the remainder on spot markets in southeastern Australia to capitalise on demand projected to reach more than 50 PJ (1.3 bcm) by 2020.

Edited by

Andrew Kemp


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