Balanced portfolio; clear strategy
Cooper Energy Ltd (ASX:COE) has production of c 1,300b/d from projects in the Cooper Basin and Indonesia. It holds gas resources in the Gippsland Basin, as well as exploration acreage in the Cooper, Otway and Gippsland basins in Australia and South Sumatra in Indonesia. The Gippsland Basin gas projects are predicted to deliver 317PJ of gas to the Australian East Coast and generate revenue of A$2.3-3.2bn over eight years.
Revenue-generating
The Cooper Basin and Indonesian oil production is low cost and cash generative at current prices. The company produced 475 mbbl of oil in FY15 and is predicting similar production levels for FY16. The average opex for the production was A$32.69/bbl and achieved an average price of A$80.44/bbl during the year. Indonesian production was up 75% in QY15 following drilling of the Bunian-3 well. Cooper has 244,998bbls hedged for FY16 with A$50 put options and A$80-90.57 collar options. As of 30 June 2015, Cooper had revenues of A$38.9m, total capital expenditure of A$28.4m and held cash of A$29.2m.
Australian core
Activity in Cooper Basin is focused around 1,000b/d production and reinterpretation of historic 3D seismic for FY16 drilling. The Gippsland Basin is the driver for largescale revenue potential with three projects including a 50% interest in the Sole gas field and the onshore Orbost gas plant, which has a 90TJ/day capacity. The field was acquired in May 2015 when the project entered FEED stage the company booked 106PJ of 2C resource. Santos (operator) will look to make FID in Q3 CY16. Cooper is paying 100% of the FEED (A$27m) as part of A$50m farm-in and expects to pay it through existing resources and cash flow. Gas offtake agreements are being negotiated alongside the engineering work and the first heads of agreements are expected in Q3 CY15. Elsewhere in the basin, the company is progressing its operated Manta gas field with 13.9mmboe net 2C contingent resources. Appraisal wells are expected in 2017 with FEED in early 2018.
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