Cooper Energy (ASX: COE) expects savings of more than AUD 3.0mn from cost-cutting initiatives

Highlights

• Cooper Energy is engaged in commercialization of oil, gas and other resources in domestic markets
• In 1QFY24, the company delivered 4% growth in its revenue to AUD 50.8 million
• Today (3 January 2024), COE shares closed 11.54% up at AUD 0.145 apiece

Cooper Energy Limited (ASX:  COE) is an energy company which is engaged in supplying gas in south-east Australia and copper sasin oil production. The ASX-listed exploration and production entity witnessed a decline in its revenue in the financial year 202 (FY23) due to a decrease in sales volume.

During the stated period, sales revenue fell by 4% YoY to AUD 196.9 million. Meanwhile, u-EBITDAX increased by 35% YoY to AUD 109.3 million because of an 8% jump in production and margin expansion. Moreover, annual operating cash flow grew by 9% to AUD 62.8 million in FY23.

The company witnessed a net loss on an underlying basis in FY23 of AUD 5.6 million due to higher unit depreciation costs.

In the first quarter of FY24, the company registered a 3% increase in production to 5.51PJe and its revenue jumped by 4% to AUD 50.8 million.

Recent business update

According to an ASX update dated 18 December 2023, the company had issued 1,084,611 share appreciation rights and 48,436,318 performance rights to its employees on 23 November 2023 and 11 December 2023, respectively. The allotment was done under an employee incentive scheme. The securities are subject to certain restrictions and under these restrictions, they will not be quoted on ASX, until the end of restrictions.

Through an ASX-update dated 15 December 2023, the company released an update on the Basker Manter Gummy (BMG) wells decommissioning campaign. Through the release, COE informed that the Helix-operated Q7000 vessel was on contract with COE, after departing the port of Geelong. The vessel will be loaded with additional equipment in sheltered water for certain days before moving to the BMG site to initiate the decommissioning campaign.

Outlook

In FY24, the company expects to deliver production from Orbest in the range of 58.5 – 65.2 The/d, which is above the average production rate of FY23.

As part of the cost out initiative, the company has decreased labour costs and headcount and is saving on entertainment and corporate expenses. These elements are expected to deliver savings of more than AUD 3.0 million.

Share performance of COE

COE shares closed 11.54% higher at AUD 0.145 apiece on 3 January 2024. Including today’s gain, COE’s share price has decreased by 19.44% in the last one year and has surged by 38.10% in the last one month.

The 52-week high of COE is AUD 0.2, recorded on 20 January 2023, and the 52-week low is AUD 0.091, recorded on 2 November 2023.

COE Daily Technical Chart, Source: EODHD/Others

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, and currency, is 03 January 2024. The reference data in this report has been partly sourced from EODHD/Others.