Cooper Energy serves up smashing results and the crowd goes wild
Cooper Energy has increased proved reserves by a factor of five and moved from loss to profit in the last 12 months.
The company (ASX:COE) moved from a $12 million loss in 2017 to a $27 million profit, including a one-off $17.2 million hit from the sale of the Orbost gas plant to infrastructure owner APA Group.
It also lifted proved plus probable reserves are now 52.4 MMboe (thousand barrels of oil equivalent which encompasses oil and gas) compared with 11.7 MMboe a year ago.
Typically “reserves” refer to oil or gas discoveries that are commercially recoverable using existing technology, while “resources” are either not yet commercially viable or are mere speculation.
Proved reserves are the estimated quantity of oil and gas in a reservoir that is able to be recovered.
The reason for the upgrade was that Cooper Energy made a final investment decision for its offshore Sole gas project in the Gippsland Basin in Victoria, and reclassified contingent resources as reserves.
Cooper Energy owns stakes in producing tenements in South Australia, operated by Beach Energy, and the Otway Basin in Victoria operated by BHP and themselves.
It owns exploration tenements in both States.
Managing director David Maxwell is negotiating gas contracts from the Otway Basin and will start selling the Sole gas soon as well — and he expects strong interest from buyers in south-east Australia.
The Australian energy Market Operator (AEMO) warned in March that gas production in Victoria would be drop faster than expected as offshore fields would decline.
It foresees deep potential shortfalls in gas by 2022 during periods of peak demand.
All of which puts producers like Cooper in a solid position.
Mr Maxwell says they within 12 months of starting production at Sole which will ramp up annual gas production by five times.
Cooper shares rose 9 per cent to 50.5c on Monday.