Cooper Energy Ltd (ASX:COE) has revealed the Final Investment Decision (FID) on its Sole gas project offshore Victoria, with the execution of a fully underwritten finance package.
The finance package includes a $250 million senior secured bank debt facility fully underwritten by Australia and New Zealand Banking Group (ASX:ANZ) and Natixis SA’s (EPA:KN) Hong Kong Branch.
The package also includes a senior secured $15 million working capital facility provided by ANZ and a fully underwritten accelerated non-renounceable entitlement offer to raise circa $135 million.
Importantly, the finance package will fund the remaining Sole gas project capital cost.
The Sole gas project involves development of the field to commence supply of gas to southeast Australia in 2019.
As per the June 2017 agreement, APA Group (ASX:APA) will acquire the Orbost Gas Plant and undertake the $250 million plant upgrade and process gas from the Sole field and other fields.
Cooper Energy, the 100% interest holder in the Sole gas field, is responsible for the $355 million offshore development and shore crossing to the Orbost Gas Plant.
The new package will also provide additional funding for Cooper’s offshore and onshore Otway Basin and Cooper Basin operations and maintenance of the offshore Gippsland Basin facilities.
The financing and achievement of the FID milestone satisfy the condition precedent to Cooper’s gas supply contracts with AGL Energy, EnergyAustralia, Alinta Energy and O-I Australia.
The consolidation of the gas prices in recent months provides confidence in the business case for the incremental development of Cooper’s gas operations.