Cooper Energy is putting the finishing touches to a $355 million Victorian offshore gas project

COOPER Energy expects to finish building its $355 million Sole offshore gas project in the next quarter, bringing to life the vision of the company to transform from an oil to a gas focused operator.

COOPER Energy expects to finish building its $355 million Sole offshore gas project in the next quarter, bringing to life the vision of the company to transform from an oil to a gas focused operator.

The Adelaide company set out in 2012 to shift from an oil explorer and producer with disparate assets in Australia and globally, to a firm with a domestic gas focus.

Managing director David Maxwell and his team accurately foresaw the current east coast gas crisis and positioned the company to be ready to respond.

Three years ago Cooper bought Santos’s Victorian gas assets for $82 million, including the Sole project, and the following year signed off on its development.

Sole, which will supply about 24 petajoules of gas per year, is now 98 per cent completed (as at March 31), within budget, and is expected to be ready to supply gas from mid-June.

Completion of the onshore elements of the project, owned by APA, is anticipated the following quarter when gas can then flow to the Orbost gas plant.

In the company’s quarterly report Mr Maxwell said the Sole progress was significant, and the company also had an active drilling campaign in the offing.

“The work done during the quarter has moved us closer to the transformational growth coming from our gas business,’’ he said.

“The construction phase of the offshore element of the Sole Gas Project was completed. The offshore project is now 98 per cent done and within budget.

“We advanced negotiation of new gas contracts for the start-up of Sole and for 2020.

“The company is set for an eventful final quarter as the offshore Sole Gas Project is concluded and ready to deliver gas, new gas contracts announced, and we spud the first of two gas exploration wells in the offshore Otway Basin acreage.

“These will be the first new exploration wells in the Casino/Henry permits since 2008 and we are keenly anticipating the commencement of the program in around a month’s time.

“The proximity of the targets to existing infrastructure, the speed of potential development and the quality of seismic indications from proven producing reservoirs all make for a highly attractive drilling proposition which can offer substantial growth to gas reserves and production in the coming years.”

The quarterly report stated that Cooper’s production of gas from the Casino Henry and Minerva projects and oil from the Cooper Basin was 0.33 million barrels of oil equivalent, up 14 per cent on the prior quarter.

Revenue was up 43 per cent to $20.6 million. Full year production was expected to be 1.3 million barrels of oil equivalent, down slightly from guidance of 1.4 million.

The company’s net debt was $32.3 million, compared with $7.5 million in cash at the start of the quarter.

Cooper said it was negotiating gas supply agreements from both Sole and for Casino Henry from 2020, and announcements on this front were expected in the June quarter.

Cooper said planning for a development well at Henry was continuing.

“A decision on timing of the well is expected in the September quarter 2019 after assessing the exploration drilling outcomes at Annie and Elanora,’’ the company said.

“This may impact the order of future developments to maximise production and value. A future offshore drilling campaign is targeted for late 2020/early 2021, subject to rig availability.’’

The Annie and Elanora wells in the offshore Otway Basin are expected to be drilled in the June quarter.

“The Annie and Elanora prospects are located close to existing offshore production infrastructure. Both wells will target reservoirs that are gas-producing in nearby fields.

“In the event of success, it is anticipated the exploration well will be plugged and abandoned, with the drilling of subsequent development or appraisal wells to be performed by the drilling campaign being planned for 2020/21.

“It is expected such discoveries would be developed and connected for processing at the Minerva Gas Plant, which the Casino Henry Joint Venture parties have an agreement to acquire on cessation of production at Minerva.’’

An onshore Otway well, Dombey-1, is also expected to be drilled soon in collaboration with Beach Energy.