Cooper Energy posts improved underlying result after gas price gains

Cooper Energy has delivered a $3.1 million underlying profit for the six months to December, boosted by a 32 per cent increase in gas revenue.

Cooper Energy managing director David Maxwell. Hollie Adams/The Australian

• Sole Gas Project nears completion for Cooper
• Cooper shares jump as Victorian gas project takes shape

Cooper Energy has delivered a $3.1 million underlying profit for the six months to December, boosted by a 32 per cent increase in gas revenue.

The underlying result was up from $2.2 million in the previous year, with gas sales rising to $25.6 million on the back of higher pricing. Oil revenue fell from $11.8 million to $10.6 million.

Cooper posted a $12.6 million net loss after tax following a $16.5 million one-off hit resulting from higher than expected restoration costs at the company’s non-producing Patricia Baleen gas field in Victoria.

The net result compares with a $19.8 million net profit in the previous year, which included a $21.9 million gain on the sale of the Orbost Gas Plant in Victoria to APA.

Cooper Energy managing director David Maxwell said this year’s interim result demonstrated the emerging value of the company’s gas business ahead of completion of its flagship Sole Gas Project in Victoria.

“In 2018 we replaced legacy gas contracts with new sales agreements in line with market prices,” he said.

“This process is ongoing, as another round of agreements commenced on 1 January this year and we are currently negotiating gas sales agreements for un-contracted gas to be produced from Sole start-up and beyond.

“The completion of the Sole Gas Project will be transformative, lifting gas production almost five-fold from this year’s level.

“Sole is our first offshore development project as operator and the most substantial element of the gas strategy we have been executing since 2012.”

The $355 million Sole project off the Victorian coast was 86 per cent complete by the end of December, and is expected to produce its first gas in June.

It has proved and probable gas reserves of 249 petajoules, of which 179 have been contracted for sale.

Mr Maxwell said the company had also accelerated its exploration activities in the Otway Basin.

“The prospects to be drilled are low risk, low-development-cost and can be tied into our Otway Basin infrastructure and are capable of delivering the next wave of growth after Sole,” he said.

“The drilling of the Annie and Elanora wells scheduled for May will be the culmination of more than two years of work by our technical team in analysing and understanding the prospectivity of our Otway Basin acreage.

“This work confirms our assessment of the offshore Otway Basin as the best location for finding and developing cost-competitive gas reserves for south-east Australia.”

Cooper Energy holds a 50 per cent interest in the Annie and Elanora wells.

Its shares were trading 1 per cent lower in morning trade at 49c.