Cooper Energy (ASX:COE) has acquired a 50% interest in the Sole Gas Field in the offshore Gippsland Basin offshore and the Orbost Gas Plant in Victoria from Santos (ASX:STO) for up to $52.5 million.
The acquisition is a cornerstone for development of its offshore Gippsland gas resources.
Sole in VIC/RL3 is expected to add about 100 petajoules of gas to the company’s Best Estimate (2C) resources, adding to the 120PJ of 2C resources it holds in the Basker Manta Gummy gas and liquids project.
It is about to enter detailed Front-End Engineering and Design for a development to commence production in late 2018/early 2019.
FEED work is expected to be completed in the first half of 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.
The gas will be sourced from conventional gas reservoirs through a single vertical well and will be piped to the Orbost plant, which is Eastern Gas pipeline.
Orbost Gas Plant is currently processing gas from the Longtom gas field and will have to be modified to process gas from Sole.
Cooper will make an initial cash payment of $2.5 million to Santos and will then fund 100% of the initial $50 million of project costs.
FEED work is expected to require expenditure of $25 million to $29 million.
As at the end of September 2014, Cooper had cash and financial assets of $70.9 million.
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