Oil and Gas company Cooper Energy Limited (ASX: COE) today announced FY19’s first quarter result for the 3 months to 30 September 2018, posting higher production and sales.
Quarterly production for the three months ended 30 September 2018 has gone up by 6% to 0.37 MMboe from previous quarter’s 0.35 MMboe. But it is significantly lower than the pcp production of 0.43 MMboe on the back of lower output received from gas projects Casino Henry and Minerva.
However, the sales revenue surged up to $21.8 million in September 2018 quarter, 51% higher than the $14.4 million previously reported for quarter September 2017. The sharp rise in sales corresponds to higher prices for oil and gas and higher gas production.
Cooper Energy Managing Director David Maxwell commented that company has started the new fiscal year in line with its previous performance, reporting notable growth in gas revenue, securing new contracts and advancing the Sole Gas Project within budget and schedule.
The management informed that Sole Gas Project located in Gippsland Basin, offshore Victoria, has been completed 74% and is now just 9 months away to final close. Jointly owning the project with Santos, Cooper Energy stated that production wells at Sole have been tested and completed and the company is now advancing to connect Sole to Orbost Gas Plant through pipelines. Moving ahead with the Sole Gas Project, the company has incurred capital expenditure of $66.2 million and borrowing of $27.3 million in September 2018 quarter.
Further, the company recently inked the new gas supply agreements with Origin Energy and O-I Australia, fully contracting Casino Henry gas production for calendar year 2019. As per the terms of agreement, COE’s Casino Henry joint venture will supply gas to Origin Energy from 1 January 2019 to 1 January 2020 at current market prices. Whereas, in additional agreement with O-I Australia, finalized last week, the Cooper Energy will make available 3 terajoules of gas per day from its 50% share of production from Casino Henry, starting from calendar year 2019.
Mr. Maxwell stated that the 2019 Casino Henry gas supply agreements with Origin Energy and O-I is in line with the company’s gas marketing strategy.
It has been informed that marketing of the initial Sole volumes is underway while strong customers’ support has been observed in south-east Australia gas market.
As at 30 September 2018, COE’s cash was $203.8 million, compared with $236.9 million at the beginning of the quarter. Cooper Energy told that cash held in escrow reduced to $5.8 million from $20.2 million at FY19 start ahead of payments for the offshore drilling program.
The quarterly result seems to miss the investors expectation as Cooper Energy’s stock plunged 2.151% or $0.010 to close at $0.455 on 15 October 2018. The stock has seen a performance change of +78.85% over the past one year while today it traded at a PE of 25.830 x with market capitalization of $744.5 million.
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