Cooper Energy : Quarterly Report - Q2 FY22

Quarterly Report

For the three months ended 31 December 2021

27 January 2022

Key features

only	• Athena Gas Plant sales commence after successful commissioning and pipeline cut over
•	Orbost Gas Processing Plant performance improving: 40 TJ/day average processing rate (Q1 FY22:
		39 TJ/day) and 50TJ/day from 1 January between absorber cleans
	• Record Year to Date production sales volume, and revenue: YTD production up 27% to 1.47 MMboe,
use		sales volume up 67% to 2.02 MMboe and revenue up 96% to $95.4 million
• Quarterly production, sales volume, and revenue: total production down 19% to 0.66 MMboe, sales
	volume down 4% to 0.99 MMboe and revenue down 2% to $47.3 million; mainly impacted by planned
	downtime associated with the cut over from the Iona Gas Plant to the Athena Gas Plant
• Orbost Gas Processing Plant Phase 2B works remain on schedule for mid Q3 FY22
•	Reduced requirement for third party gas purchases from January 2022
Comments from Managing Director, David Maxwell
personal

"Cooper Energy continued to build strong momentum from FY21 with significant milestones achieved in the December quarter.

"The successful commissioning of the Athena Gas Plant was completed in December and is now processing our Casino, Henry and Netherby gas, with work ongoing to optimise the processing rates. Cooper Energy is now an established gas plant operator, creating the opportunity for synergies that complement our offshore gas field expertise and gas sales portfolio position.

"The optimisation of processing at the Orbost Gas Processing Plant has resulted in a higher average processing rate. Operational improvements at Orbost continued into January with a stable processing rate of 50TJ/d from 1 January with the cleaning intervals of the two sulphur absorbers significantly extended.

"The combination of these events and the reprofiled customer terms for Sole gas sales from 1 January means Cooper Energy can reduce its requirement for third-party gas purchases and increase opportunities for spot gas sales in a tight gas market" Mr Maxwell said.

Key performance metrics

For	$ million unless indicated	Dec.	Sep.		Dec.		Qtr on Qtr	FY21		FY22		Change
Q2 FY21	Q1 FY22		Q2 FY22		change	YTD		YTD
	Production (MMboe)	0.49	0.81		0.66		(19%)	1.16		1.47		27%
		Sales volume (MMboe)	0.53	1.03		0.99		(4%)	1.21		2.02		67%
		Sales revenue	24.6	48.1		47.3		(2%)	48.6		95.4		96%
		Cash and cash equivalents	115.3	95.9		92.2		(4%)	115.3		92.2		(20%)
		Net Debt	114.1	115.1		111.8		(3%)	114.1		111.8		(2%)
		Ave. gas price ($/GJ)	7.27	7.41		7.47		1%	6.35		7.44		17%

Authorised by:	Investor enquiries:	Media enquiries:
David Maxwell	Eddy Glavas	Bindi Gove
Managing Director	General Manager Commercial & Development	Head of External Affairs
[phone]	[phone]	[phone]

Financial

Sales volume and revenue

Sales volume of 0.99 MMboe was 4% lower than the prior quarter mainly due to the temporary shut in of Casino Henry Netherby (CHN) production during the cut over to the Athena Gas Plant. Sole gas sales remaining steady with the previous quarter at 5.5 PJ (59 TJ/day average). Sales revenue of $47.3 million was 2% lower than the prior quarter. The average realised gas price was slightly up to $7.47/GJ, and the average realised oil and condensate price up 20% to $106.9/boe.

only				Dec.	Sep.		Dec.	Qtr on Qtr	FY21			FY22	Change
			Q2 FY21	Q1 FY22		Q2 FY22	change	YTD			YTD
Sales volume
	Gas1	PJ	3.0	6.1		5.9		(3%)	6.9			11.9		72%
use
	Oil	kbbl	39.0	33.9	33.5	(1%)	79.7		67.4		(15%)
	Condensate	kbbl	0.5	0.6	0.3	(50%)	1.0		0.9		(10%)
	Total sales volume	MMboe	0.53	1.03	0.99	(4%)	1.21		2.02		67%
Sales revenue ($ million)
	Gas1		21.8	45.0		43.7		(3%)	43.6			88.7		103%
		Oil and condensate		2.8	3.1	3.6	16%	5.0		6.7		34%
		Total sales revenue		24.6	48.1	47.3	(2%)	48.6		95.4		96%
		Ave. realised prices
		Gas	$/GJ	7.27	7.41	7.47	1%	6.35		7.44		17%
		Oil and condensate	$/boe	70.9	88.9		106.9		20%	62.0			97.8		58%
personal	1. Includes sale of third-party gas purchases of 1.3 PJ in Q1 FY22 and 1.4 PJ in Q2 FY22
The table below summarises Sole GSA sales and gas sources utilised to service Sole customer requirements.
Sole GSA sales			Sep.			Dec.							Sep.			Dec.
and gas sources		Q1 FY22		Q2 FY22					Q1 FY22			Q2 FY22
Sole GSA sales		PJ	5.5		5.5			TJ/day (average)		59			59
Comprising:
	OGPP processing		PJ	3.6		3.7			TJ/day (average)		39			40
	Otway Basin supply		PJ	0.6		0.4			TJ/day (average)		6			4
		Third-party gas purchases	PJ	1.3		1.4			TJ/day (average)		14			15

Third-party gas purchases accounted for 25% of total Sole gas sales volume during the quarter (Q1 FY22:
22%). The slight increase in the December quarter was attributed to less gas portfolio coverage from the CHN
fields. All customer nominations were met during this period.
For	1

The average purchase price of third-party gas supply for the quarter was $7.76 per gigajoule net of APA contributions. Short-term gas supply availability and prices remained volatile through the quarter, with Victoria spot prices ranging from $6.88/GJ to $15.50/GJ at an average $10.02/GJ. Cooper Energy optimised multiple back up supply sources particularly in periods when APA undertook the Orbost Gas Processing Plant absorber cleans (owned and operated by APA Group (ASX: APA)), and during the CHN outage while transitioning gas

1Source: AEMO website

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processing from the Iona Gas Plant to the Athena Gas Plant (owned by Cooper Energy (50% and operator) and Mitsui E&P Australia Pty Ltd (25%) and Peedamullah Petroleum Pty Ltd (25%)).

The forecast for the remainder of FY22 is for materially lower third-party purchases due to:

only	• new arrangements with AGL effective from 1 January 2022 that reduce the Sole Annual Contract
	Quantity (ACQ) as announced on 13 September 2021
	Plant.
	•	Orbost Gas Processing Plant performance has improved to 50TJ/d and the Phase 2 works are

expected to reduce the requirement for absorber cleans resulting in a higher average processing rate; and

• firm gas processing via Athena eliminating exposure to interruptions as experienced at the Iona Gas

These factors also increase the opportunity for surplus gas supply above contractual commitments for sale into the spot market, or under short term contractual arrangements.

Capital expenditure

Incurred capital expenditure of $5.8 million was the same as the prior quarter, with the majority of spend related to the Athena Gas Plant. Further commentary is contained in the Exploration and development section

use	commencing on page 5.
$ million	Dec.	Sep.		Dec.	Qtr on Qtr	FY21		FY22	Change
personal	Q2 FY21	Q1 FY22		Q2 FY22		change	YTD		YTD
Exploration and appraisal	1.0	0.5	0.9	80%	1.8	1.4	(22%)
Development	10.6	5.3		4.9	(8%)	15.2		10.2	(33%)
Total capital expenditure	11.6	5.8	5.8	0%	17.0	11.6	(32%)
By basin	Dec. Q2 FY22
	$ million	Exploration Development		Total
	Otway Basin	0.6	4.3	4.9
	Gippsland Basin	0.0	0.0	0.0
	Cooper Basin	0.3	0.4	0.7
	Other	0.0	0.2	0.2
	Total capital expenditure	0.9	4.9	5.8

Liquidity

As at 31 December 2021, Cooper Energy had cash reserves of $92.2 million (Q1 FY22: $95.9 million) and

drawn debt of $204.0 million (Q1 FY22: $211.0 million), as summarised below.

For	$ million	Dec.	Sep.		Dec.	Qtr on Qtr	FY21		FY22	Change
Q2 FY21	Q1 FY22		Q2 FY22	change	YTD		YTD
Cash and cash equivalents	115.3	95.9	92.2	(4%)	115.3	92.2	(20%)
	Drawn debt	229.4	211.0		204.0	(3%)	229.4		204.0	(11%)
	Net debt	114.1	115.1	111.8	(3%)	114.1	111.8	(2%)

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2 Figures unaudited and subject to change

Sales volume

Underlying EBITDAX1

Capital expenditure2

3.01 MMboe

$30.0 million

$32.3 million

personal1 EBITDAX excludes any benefits that would arise due to commencement of lease accounting associated with the Sole Gas Processing Agreement with APA during the period which would reclassify a portion of processing charges to depreciation and interest

2 Capital expenditure guidance excludes expenditure for the Orbost Gas Processing Plant Phase 2B works (largely funded from escrowed funds); includes corporate expenditure on IT hardware and systems upgrades

Production

Quarterly oil and gas production of 0.66 MMboe was 19% lower than the prior quarter, mainly due to the CHN gas planned downtime whilst transitioning gas processing to the Athena Gas Plant.

ForGippsland Basin (Sole)

Sole gas production of 3.7 PJ was 3% higher than the prior quarter. Average production of 40 TJ/day compares with 39 TJ/day during the prior quarter.

October production was impacted by a lower average gas processing rate due to operational trials during implementation of the agreed Phase 2B scope for the spray distribution nozzles in each sulphur absorber. The lower rate in October was slightly more than offset by the higher average gas processing rate after the operational trials, which reflected an extension of the absorbers' operating cycles and an increase in stable gas processing rate between absorber cleans up to 48TJ/d from 16 December. From 1 January 2022, the gas processing rate increased to 50TJ/d and was held stable until 19 January for the next back-to-backabsorber

3.0 - 3.4 MMboe

3.7 - 4.0 MMboe

$53 - 63 million

$24 - 28 million

Production

2.63 MMboe

FY22 guidance

FY22 guidance

FY21

Guidance

useThe guidance for FY22 remains unchanged. However, the operational improvements that have led to higher stable Orbost Gas Processing Plant processing rates are anticipated to favourably impact the Company's production, sales volume and Underlying EBITDAX.

FY22 guidance ranges are provided below:

Material impacts on cash reserves during the quarter included2:

• customer receipts less payments to suppliers of ~$13 million
• quarterly debt principal repayment of $7.0 million and net interest payments (including leases) of $2.6 million
• rehabilitation costs and Petroleum Resource Rent Tax payments of $1.0 million; and
• capital expenditure of $6.5 million

onlyHedging

For the quarter ending 31 December 2021 Cooper Energy had a total of 30,942 bbl of oil production hedged, with a floor price of US$70/bbl and a cap price of US$79/bbl. The Company currently has no oil hedges in place.

cleans. Gas processing rates returned to 50 TJ/d on 25 January post the absorber cleans and is expected to continue at this rate until Phase 2B works commence in late February.

The Sole gas field continues to perform in line with expectations.

Otway Basin (Casino, Henry and Netherby)
CHN gas production of 0.2 PJ was 83% lower than the prior quarter. Average production of 3 TJ/day compares
with 13 TJ/day during the prior quarter. The decrease this quarter was due to the planned downtime associated
with the cessation of gas processing at the Iona Gas Plant (owned and operated by Lochard Energy), the
pipeline cutover and commissioning of the Athena Gas Plant. The production outage was from 13 November to
15 December when gas sales recommenced.
only
Cooper Basin
Oil production of 31.1 kbbl was 10% lower than the prior quarter, mainly due to natural field decline. Production
from PEL 92 contributed 29.9 kbbl (Q1 FY22: 33.6 kbbl) and the Worrior field in PPL 207 contributed 1.2 kbbl
(Q1 FY22: 1.1 kbbl).
useProduction by product	Dec.	Sep.	Dec.	Qtr on Qtr	FY21	FY22	Change
			Q2 FY21	Q1 FY22	Q2 FY22	change	YTD	YTD
Sales gas	PJ	2.7	4.8	3.8	(21%)	6.6	8.6	30%
Oil and condensate	kbbl	40.7	35.3	31.6	(10%)	82.1	66.9	(19%)
Total production	MMboe	0.49	0.81	0.66	(19%)	1.16	1.47	27%
Production by basin		Dec.	Sep.	Dec.	Qtr on Qtr	FY21	FY22	Change
	Q2 FY21	Q1 FY22	Q2 FY22	change	YTD	YTD
Gippsland Basin (Sole)
	Sales gas	PJ	1.4	3.6	3.7	3%	3.9	7.3	87%
Otway Basin (CHN)
	Sales gas	PJ	1.3	1.2	0.2	(83%)	2.7	1.3	(52%)
	Condensate	kbbl	0.5	0.6	0.5	(17%)	1.0	1.1	10%
Cooper Basin
personal	Oil	kbbl	40.2	34.7	31.1	(10%)	81.1	65.8	(19%)

Total production	MMboe	0.49	0.81	0.66	(19%)	1.16	1.47	27%
NB. Preliminary Cooper Basin production data for the current quarter

ForExploration and development

Gippsland Basin

Development

Orbost Gas Processing Plant

The Phase 2B works at Orbost Gas Processing Plant have been ongoing throughout the quarter. The Cooper Energy endorsed Phase 2B scope of work aims to improve plant reliability and sustainable production rates by:

• implementation of spray nozzles in the sulphur absorbers to mitigate foaming; and

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