Commencement of sales from Cooper Energy’s Sole gas field has been delayed following the upgrade of the Orbost Gas Processing Plant. Commissioning of the plant is now progressing, with the expectation that full firm supply from Sole will commence in March 2020.
Cooper Energy Managing Director David Maxwell said the start-up of Sole will be the culmination of a five-year effort by the company to bring the field to market.
Cooper Energy completed its portion of the Sole Gas Project, the offshore development, in July 2019 with zero lost time injuries and capital expenditure of $347 million, well within the budget of $355 million.
“Sole has demonstrated our capability in developing and commercialising gas for south-east Australia,” Mr Maxwell said.
“We have more opportunities in our portfolio and our work program for the second half is heavily weighted to advancing new projects and exploration that can bring more gas to market.”
The company announced development of the Annie gas discovery was being evaluated as part of a broader Otway Phase-3 Development (OP3D) which also included the drilling of an additional development well on the Henry gas field.
A number of potential development concepts are being assessed, all of which would utilise the recently acquired Minerva Gas Plant and bring over 100 PJ of gas to market. The company is targeting selection of a preferred concept and project FID within this calendar year for the delivery of first gas in 2022.
Other opportunities to be assessed in the second half for inclusion in an offshore drilling campaign for 2021-2022 (subject to rig availability) include the Manta-3 appraisal well and gas exploration in the offshore Gippsland and Otway basins.
The company strengthened its gas contract portfolio subsequent to balance date with a two-year supply agreement a with glass packaging manufacturer. The agreement, which commences in January 2021, means Cooper Energy now holds take or pay contracts for gas supply equal to 87 per cent of its planned production to June 2022.
“Customer interest in securing term contracts for gas supply from south-east Australia remains strong,” said Mr Maxwell.
“We are about to commence marketing of our uncontracted Casino Henry 2021 gas production. Preliminary discussions suggest it will be keenly bid and we anticipate gas supply agreements should be secured within the coming six months.”
The company recorded one lost time injury for the period (zero in the pcp) after a contractor’s employee was injured on the Ocean Monarch in the offshore Otway Basin. The incident occurred while the rig was not under the direction of Cooper Energy.
Production guidance for the company’s existing producing assets of approximately 1.2 million boe for the full year was reaffirmed while capital expenditure forecasts for the year were trimmed. The full year production guidance will be upgraded following the commencement of full production from Sole.
“We are expecting a transformational uplift in our production and cash flows from Sole,” said Mr Maxwell.
“Plant design rates of 68 terajoules per day would see our total daily production lift to approximately 5 times current levels. The start of supply to the customers whose commitment enabled Soleto proceed will be the highlight of the year. With plant commissioning advancing, we are expecting this event to occur in the near future,” he said.
The company expects to participate in 3 development and 2 exploration wells in the FY20 second half, all conducted by the PEL92 joint venture in the Cooper Basin. The wells will be reported through the company’s quarterly activity report to the ASX.
