Cooper Energy : Q2 FY21 Quarterly Activities Report 28 January 2021

Quarterly Report

For the three months ended 31 December 2020

28 January 2021

Key features

• Record half year production and sales volumes: Half year production up 76% to 1.16 MMboe and sales volumes up 86% to 1.21 MMboe on increased Sole production
• Quarterly production down 28% to 0.49 MMboe: Lower Sole gas production during reconfiguration of the Orbost Gas Processing Plant
• Quarterly sales revenue up 3% to $24.6 million: Higher realised oil and gas prices
• Commencement of long-term Sole gas sales agreements: Annual contracted gas volumes of 19.75 PJ in 2021 to deliver a step-changein revenue and cash flow
• Orbost Gas Processing Plant reconfigured: APA undertaking absorber testing and commissioning, with production expected to increase to a sustainable rate of 45 TJ/day
• Athena Gas Plant works commenced: Project to deliver own processing capacity for Casino Henry gas and future developments

Comments from Managing Director David Maxwell

"Cooper Energy's performance during the quarter demonstrates our maturing gas business.

"We have commenced supply of material gas volumes to domestic customers under long-term Sole gas sales agreements and established our gas trading function to support these contractual commitments.

"While works continue to establish a stable gas production rate at the Orbost Gas Processing Plant, we are seeing positive signs from reconfiguration of the plant's absorbers and remain confident that the plant's capacity rate of 68 TJ/day can be achieved over time.

"In the second half of FY21, higher gas sales volumes and net cash margins will be generated from Sole and underpinned by our Transition Agreement with APA.

"Our east coast gas growth strategy remains unchanged notwithstanding the delays in commissioning the Orbost plant. We believe exploration and development of gas resources in the Otway and Gippsland basins is the most efficient way to increase supply to southern markets", Mr Maxwell said.

Key performance metrics

$ million unless indicated	Dec.	Sep.		Dec.		Qtr on Qtr
Q2 FY20	Q1 FY21		Q2 FY21		change

FY20	FY21	Change
YTD	YTD

Production (MMboe)	0.27	0.68	0.49	(28%)	0.66	1.16	76%
Sales volumes (MMboe)	0.26	0.68	0.53	(22%)	0.65	1.21	86%
Sales revenue	16.4	24.0	24.6	3%	39.1	48.6	24%
Cash and cash equivalents	150.7	133.6	115.3	(14%)	150.7	115.3	(23%)
Net Debt	73.3	95.8	114.1	19%	73.3	114.1	56%
Ave. gas price ($/GJ)	8.40	5.61	7.25	29%	8.35	6.35	(24%)

Authorised by:	Investor enquiries:	Media enquiries:
David Maxwell	Derek Piper	Bindi Gove
Managing Director	Head of Investor Relations	Head of External Affairs
[phone]	[phone]	[phone]

Financial

Sales volumes and revenue

Sales volumes of 0.53 MMboe were 22% lower than the prior quarter, mainly due to lower Sole gas production during reconfiguration of the Orbost Gas Processing Plant (OGPP) operated by APA. Despite lower production volumes, sales revenue of $24.6 million was 3% higher than the prior quarter due to higher realised spot gas prices and the commencement of the Sole gas sales agreements (GSAs).

The average realised gas price was up 29% to $7.25/GJ (Q1 FY21: $5.61/GJ) and the average realised oil and

condensate price was up 28% to $69.7/boe (Q1 FY21: $54.3/boe).

No oil hedges were in place during the quarter or are in place as at the date of this report.

Dec.	Sep.
Q2 FY20	Q1 FY21

Dec.	Qtr on Qtr
Q2 FY21	change

FY20	FY21	Change
YTD	YTD

Sales volumes

Gas1	PJ	1.3	3.9	3.0	(23%)	3.4	6.9	103%
Oil	kbbl	47.7	40.0	39.6	(1%)	97.9	79.7	(19%)
Condensate	kbbl	0.7	0.5	0.6	20%	2.3	1.0	(57%)
Total sales volumes	MMboe	0.26	0.68	0.53	(22%)	0.65	1.21	86%
Sales revenue ($ million)
Gas1		11.2	21.8	21.8	0%	28.5	43.6	53%
Oil and condensate		5.2	2.2	2.8	27%	10.6	5.0	(53%)
Total sales revenue		16.4	24.0	24.6	3%	39.1	48.6	24%
Ave. realised prices
Gas	$/GJ	8.40	5.61	7.25	29%	8.35	6.352	(24%)
Oil and condensate	$/boe	107.4	54.3	69.7	28%	105.8	62.0	(41%)

1. Includes sale of third-party gas purchases of 56 TJ in Q2 FY21
2. Includes sale of gas at spot prices during OGPP commissioning

Capital expenditure

Incurred capital expenditure of $11.6 million was 103% higher than the prior quarter following commencement of site works at the Athena Gas Plant (Cooper Energy: 50% and operator; Mitsui: 50%). The Athena Gas Plant Project aims to commission own gas processing capacity for the Casino Henry fields in the Otway Basin and future developments. Further commentary is contained in the Exploration and development section on page 6.

Shared capital expenditure in relation to OGPP Phase 2 works and commissioning has been expensed. Further information is contained in the Transition Agreement with APA section on page 4.

Updated full year FY21 capital expenditure guidance will be provided with Cooper Energy's half year results on 15 February 2021.

$ million	Dec.	Sep.
Q2 FY20	Q1 FY21

Dec.	Qtr on Qtr
Q2 FY21	change

FY20	FY21	Change
YTD	YTD

Exploration and appraisal	6.6	1.1	1.0	(9%)	32.7	1.8	(94%)
Development	17.8	4.6	10.6	130%	31.1	15.2	(51%)
Total	24.4	5.7	11.6	103%	63.8	17.0	(73%)

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By basin		Dec. Q2 FY21			FY21 YTD
$ million	Exploration	Development	Total	Exploration	Development	Total
Otway Basin	0.5	8.3	8.8	0.8	12.6	13.4
Gippsland Basin	0.5	0.0	0.5	1.0	0.0	1.0
Cooper Basin	0.0	0.5	0.5	0.0	0.5	0.5
Other	0.0	1.8	1.8	0.0	2.1	2.1
Total	1.0	10.6	11.6	1.8	15.2	17.0

Liquidity

As at 31 December 2020, Cooper Energy had cash reserves of $115.3 million (Q1 FY21: $133.6 million) and drawn debt of $229.4 million (no change).

$ million	Dec.	Sep.		Dec.		Qtr on Qtr
Q2 FY20	Q1 FY21		Q2 FY21		change
Cash and cash equivalents	150.7	133.6		115.3		(14%)
Drawn debt	224.0	229.4		229.4		-
Net debt	73.3	95.8		114.1		19%

Commercial and corporate

Sole Gas Sales Agreements

As announced on 30 December 2020, Cooper Energy has commenced supply of Sole gas to its utility and industrial customers under long-term GSAs. These GSAs total 19.75 PJ of gas supply in 2021 (54 TJ/day average) and provide annual take-or-pay obligations for minimum supply of 90% of the contracted volumes.

Prior to commencement of the GSAs, Sole gas was being sold at spot prices, less transportation costs, with revenue and operating costs shared with APA per the Transition Agreement (announced 20 August 2020 and 30 October 2020 and described in the Transition Agreement with APA section on page 4). Commencement of the Sole GSAs delivers a material step change in revenue and cash flow.

To ensure Sole GSA commitments are satisfied while commissioning of OGPP continues, Cooper Energy has secured alternative gas supply sources and established an internal gas trading function. Alternative gas supply sources include contracted volumes on an as needs basis, uncontracted Casino Henry gas to support spot market purchases and gas services rights on the Eastern Gas Pipeline.

As provided for in the Transition Agreement, APA will make contributions to the cost of certain back-up supply arrangements in instances of production shortfalls. This provides Cooper Energy with a comparable net cash margin as if all required Sole GSA volumes had been processed at OGPP and made available for sale. The Transition Agreement expires at the earlier of commissioning or 1 May 2021, with the option for Cooper Energy to extend by one year.

Board change

As announced on 11 November 2020, Ms Alice Williams stepped down from the board of directors, effective

12 November 2020. Ms Williams served as a non-executive director since 2013 and was Chairman of the Audit Committee for most of her tenure.

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Transition Agreement with APA

Cooper Energy and APA entered into a Transition Agreement to provide the framework for commencing Sole GSAs and commissioning OGPP as early as possible, as announced on 20 August 2020 and 30 October 2020. The Transition Agreement provides for revenue and cost sharing mechanisms during the commissioning phase and contributions to Cooper Energy for costs incurred in sourcing alternative gas, if required, to service the Sole GSA commitments. Key elements of the Transition Agreement are summarised below.

Transition Agreement with APA

Overarching objective	• Commence Sole GSAs as early as possible
	• For gas volumes sold on the spot market prior to reaching commissioning
	(Practical Completion) of OGPP, associated revenue and operating costs are
Revenue and cost sharing	shared equally by Cooper Energy and APA
	• Agreed capital expenditure in relation to OGPP Phase 2 works and
	commissioning are shared equally by Cooper Energy and APA
	• Sole GSAs commenced on 1 December 2020 and 1 January 2021 for gas supply
	of 19.75 PJ (54 TJ/day average) in 2021, with annual take-or-pay obligations for
Commencement of GSAs	minimum supply of 90% of contracted volumes
• All revenue associated with Sole GSA gas sales is attributable to Cooper Energy
	• Cooper Energy to pay a tariff to APA for Sole GSA volumes processed at OGPP
	at rates consistent with the original Gas Processing Agreement
	• If daily OGPP gas processing does not meet Sole GSA volume requirements,
Compensation arrangements	APA will contribute to the cost of sourcing gas from back-up supply arrangements
• Compensation arrangements provide Cooper Energy with a comparable net cash
	margin as if all the gas had been processed at OGPP
Term	• Expiry at the earlier of OGPP Practical Completion or 1 May 2021, with the option
for Cooper Energy to extend by one year

Subject to audit, for the six months ended 31 December 2020 Cooper Energy will recognise a $7.6 million expense for APA's share of revenue from gas volumes sold on the spot market, and a $3.2 million expense for Cooper Energy's share of associated operating costs. No processing tariffs are payable by Cooper Energy for gas volumes sold on the spot market. Minimal sales of gas volumes on the spot market are expected in

H2 FY21 due to commencement of Sole GSAs on 1 December 2020 and 1 January 2021.

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