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The Australian economy has an inclination for lower energy concentration and higher energy efficiency over time, as economic development in Australia over current decades has usually outperformed growth in energy consumption, according to Australian Government Energy Update 2019. This signifies collective enhancements in energy productivity as well as a change in the economy far from extremely energy-concentrated industries like manufacturing towards less energy-concentrated industries like services.
Enhanced use of renewable energy as an alternative of fossil fuels for electricity production has also had a clear effect on energy production. Energy productivity increased by 2.0% in the year 2017–18 and by 20 percent in the last ten years.
The country now produces $294 million for each single petajoule of energy used in GDP, which is about $50 million extra than 10 years ago. Then again, Australia now utilizes 17 percent less energy/dollar of economic output than 10 years ago and the country utilizes about eight per cent less energy/person than 10 years ago.
Given the backdrop, Let’s us look at two energy players:
Cooper Energy Limited (ASX: COE) - Update on Sole Gas Project
Cooper Energy is an upstream oil and gas exploration and production company whose primary function is to find, secure, produce, develop and sell hydrocarbons.
The Sole Gas Project has cleared a breakthrough achievement with the entry of gas into the Orbost Plant from the Eastern Gas Pipeline. APA Group has upgraded Orbost Gas Processing Plant to handle gas through the Sole gas field.
Below are the further details:
- The development and commissioning of Sole has been finished and the field is ready to supply gas;
- Commissioning of the Orbost plant is progressing for its second phase, which will involve initiation of gas from Sole and commissioning of raw gas processing facilities;
- Conclusion of second phase commissioning is to be supported by a plant production test and the commencement of firm gas supply from Sole;
- The first gas flow from the field to the plant is expected later in February;
- Full rate production and commercial operation for firm gas supply are expected in March 2020.
Cooper Energy Signs a New Gas Supply Agreement with O-I
The company has signed a new gas supply deal with O-I for the provision of 1 petajoules per year, for two years beginning from 1 January 2021, to be delivered from its equity part of production by its Casino Henry operations. The agreement contains a choice for an increase of additional 3 years.
- The contracted volume is approximately 17% of the company’s share of Casino Henry 2020 gas production of 6 petajoules;
- Cooper Energy expects to initiate marketing for other volumes of Casino Henry 2021 gas production prior to 30 June 2020.
Sales Revenue Declined by 28% During the Quarter
Sales revenue for the December 2019 quarter was $16.4 million; down by 28% than the prior quarter due to lower gas and oil volumes and lower oil prices. Revenue from the sale of gas stood at $11.2 million, down by 35% from the previous quarter’s $17.2 million. The average realised oil price for the quarter stood at A$101.00/bbl, down by 6% from the previous quarter’s A$107.48/bbl.
Below are further details:
- Quarterly production stood at 0.27 million boe, down by 31% from the previous quarter;
- Half year production was unchanged at 0.66 million boe for six months to 31 December;
- Orbost plant commissioning impacted by bushfire, gas to plant anticipated in February;
- Cash at 31 December was $150.7 million, compared with $166.8 million at the beginning of the quarter.
Stock Performance
The stock of COE traded at $0.55 on 19 February 2020 (2:15 PM AEDT), up by 1.85% from its previous closing price. The company has a market capitalisation of ~$878 million. The total outstanding shares of the company stood at 1.63 billion, and its 52-week low and high is $0.465 and $0.685, respectively. The company’s shares have given a total return of -3.57% and 1.82% in the time period of 3 months and 6 months, respectively.
Karoon Energy Ltd (ASX: KAR) Updated on Marina-1 Exploration Well
Karoon Energy is an ASX?listed international oil and gas exploration company with projects in Brazil, Australia and Peru.
The company’s Marina?1 exploration well in Block Z?38 Tumbes Basin offshore Peru, has now drilled to a depth of 3021mm near the top of the Cardalitos Formation. In the area of Tumbes basis, Marina-1 offered a huge quantity of useful data.
Numerous prospective reservoir structures were faced in the well, which were water wet and did not offer perspectivity at this site. The company will now carefully evaluate the well outcomes, but no additional drilling is scheduled in Block Z38.
Quarterly Activity Report for December 2019
During the December 2019 quarter, the company completed its funding plans involving the acquisition of a 100% operating interest in Concession BM?S?40, containing the producing Baúna oil field and the undeveloped Patola oil discovery located in the Santos Basin offshore Brazil.
Key funding and other substantial milestones reached during the quarter included:
- The company entered a fully underwritten senior term loan facility for up to US$275 million with ING Bank N.V, Singapore Branch at a competitive 4% margin over LIBOR;
- It successfully completed A$284 million equity capital raising consisting of a shareholder entitlement offer plus an institutional share placement;
- The company entered into an Oil Marketing Agreement with Shell Western Trading and Supply Limited to market 100% of the volumes from Baúna for up to 5 year.
Stock Performance
The stock of KAR traded at $1.030 per share on 19 February 2020 (2:20 PM AEDT), down by 2.83%. The company has a market capitalisation of ~$586 million as on 18th February 2020. The total outstanding shares of the company stood at ~553 million, and its 52-week low and high is $0.786 and $1.664, respectively. The company has given a total return of -1.85% and -12.33% in the time period of 3 months and 6 months, respectively.
