PERTH (miningweekly.com) – ASX-listed Cooper Energy has struck an A$82-million deal with energy major Santos to buy its Victorian gas assets.
The assets include a 50% interest in the Casino-Henry gas project, a 50% interest in the Sole gasfield and the Orbost gas plant, a 10% interest in the Minerva gasfield and plant, and full interest in the Patricia-Baleen gasfield.
Santos’s share of production from these assets resulted in 5.2 PJ of sales gas in the first half of 2016.
“This sale is in line with our stated objective to rationalise and shape our asset portfolio in order to become a low-cost, reliable and high-performance business,” said Santos MD and CEO Kevin Gallagher, adding that the sale will result in Santos exiting from offshore Victoria.
Cooper Energy will pay Santos an initial A$62-million in cash for the assets, along with a further A$20-million in cash on either the earlier of a final investment decision at Sole, or the receipt of cash consideration for any selldown of an interest in any of the Victorian gas assets.
The acquisition will be funded by a fully underwritten accelerated nonrenounceable entitlement offer, which will raise some A$62.6-million, and a combination of existing cash and the drawdown of debt facilities.
“The acquisition of Santos’s Victorian gas assets is a logical and value-adding step to accelerate our gas strategy.
“The transaction will transform Cooper Energy by substantially increasing our production, further enhancing our gas reserves and resources for supply to south-east Australia, and adding proven technical and project expertise. Our position as a gas supplier to the south-east Australian gas market will be strengthened considerably,” said Cooper Energy MD David Maxwell.
He added that, in the near term, the company will be repositioned within the oil and gas sector with a four-fold increase in its Australian production, and a nine-fold increase in its 2P reserves. The company will shift to over 85% of total production being sourced from gas sold under stable long-term contracts.
“The step-changes in production, revenue generation, resource capabilities and future opportunities enabled by this transaction are transformational,” he said.
The transaction will be completed in early 2017, subject to customary consent and regulatory approvals.