Cooper Energy Buys 50% Stake in Victorian Gas Project from Santos

Cooper Energy on Tuesday said it has agreed to acquire a 50 percent interest in the Sole gas field and the Orbost (Patricia Baleen) gas plant in Australia state of Victoria from Santos.

Consideration for the acquisition comprises an initial cash payment of $2.5 million by Cooper Energy, then funding 100 percent of the initial $50 million project costs.  The acquisition cost to Cooper Energy is effectively $27.5 million. FEED is expected to require expenditure of $25 million to $29 million.

The move cements company’s position as an emerging participant in the Eastern Australian gas market.

The Sole gas field is located in the offshore Gippsland basin and is about to enter detailed Front End Engineering and Design (FEED) for a development to commence production in late 2018-early 2019.  The gas will be sourced from conventional gas reservoirs, using existing gas infrastructure and is in close proximity to the Eastern Gas pipeline which is linked to the Victoria and New South Wales gas markets. The FEED phase is anticipated to be complete in the first half of calendar 2016.

Gas market offtake contracts and finance for project construction will be developed in parallel with the FEED in readiness for a likely FID1 decision in the third quarter of the 2016 calendar year, Cooper said. 

Cooper Energy Managing Director David Maxwell said: “This can be a cornerstone transaction for our developing offshore Gippsland Basin gas.”  

Cooper Energy expects the transaction will result in the addition of approx. 100 PJ of gas to its 2C Contingent Resources, based on information provided by Santos.  The company already carries 2C Contingent Resources of approximately 120 PJ4 (100% basis) in the Basker Manta Gummy (BMG) gas and liquids project (Cooper Energy 65% and Operator) located adjacent to Sole.