Cooper Energy (ASX: COE) is pleased to provide the following operational and financial update.
Orbost Gas Processing Plant and Sole gas field
OGPP performance and outlook
Reconfiguration of OGPP's two sulphur absorbers in Q2 FY211 has delivered improved production rates and stability. Average production in March 2021 was 42 TJ/day compared with 39 TJ/day in February and 28 TJ/day in January. Production stability is also progressively improving. However, periodic cleaning of absorbers is still required.
It is anticipated that the near-term production level from OGPP will be 45 TJ/day with six-weekly cleans for each absorber. The individual absorber cleans are staggered every three weeks with production reducing to 30 TJ/day during each three-day cleaning period. OGPP owner and operator APA Group (ASX: APA) is currently focused on increasing the stability of production at this level and extending cleaning cycles.
Production rates from OGPP have ranged from 32 TJ/day to 39 TJ/day over the past seven days ahead of scheduled maintenance planned from 11 April 2021, as described on page 2. Cooper Energy and APA continue to work together to improve the plant's performance, with the objective of achieving nameplate capacity of 68 TJ/day. To achieve the next step towards this objective, APA and Cooper Energy are discussing further capital works to be undertaken during CY2021. The objective of this work program is to further improve stability and to increase production rates above 45 TJ/day.
Details of the work program are still to be finalised and agreed. The scope of works currently under consideration includes: installation of solids removal equipment to reduce the fouling from solids deposition within the absorbers; changing the liquid distributor within each absorber to a spray nozzle to mitigate carryover during a foaming event and installation of a polishing unit to reduce the impact of hydrogen sulphide (H2S) breakthrough during foaming events.
The initial cost estimate for this work program is approximately $24 million. The costs will be shared between Cooper Energy and APA in accordance with the Transition Agreement. APA and Cooper Energy plan to review OGPP performance after these capital works and identify any further steps required to increase production. The root cause analysis is continuing, with the objective of identifying the underlying cause of OGPP foaming and fouling.
OGPP scheduled maintenance
Scheduled maintenance at OGPP will be undertaken from 11 - 18 April 2021, during which time the plant will be offline for cleaning of pipes and both absorbers in readiness for the winter production period. While offline, gas sales will continue under the Sole Gas Sales Agreements (GSAs), with gas supply sourced from Cooper Energy's existing back-up supply arrangements. In accordance with the Transition Agreement, APA will make contributions to the cost of certain back-up supply, which 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.
Sole gas field performance
The Sole gas field continues to perform without interruption and in line with expectations. The H2S content of raw gas produced from Sole is consistently within the range of 950 - 1,000 parts per million (ppm), which meets OGPP design capacity of 3,000 ppm.
Otway Basin
Production
Gas production from the Casino Henry field continues to perform in line with expectations, with current production volumes of 15 TJ/day (net to Cooper Energy). Gas volumes are being sold into customer contracts and the spot market.
Contact:
Bindi Gove
Tel: +61 406 644 913
Cooper Energy Limited (ASX: COE) is an exploration and production company which generates revenue from gas supply to south-east Australia and low-cost Cooper Basin oil production. The company is an emerging player in the south-east Australian energy sector holding a portfolio of gas supply contracts and one of the most extensive portfolios of gas-focused acreage and assets, including well located reserves and resources in the Otway and Gippsland basins. These include the Sole gas field in the Gippsland Basin which recently became the first new offshore gas development in south-east Australia to commence production in several years, the Casino Henry operations in the offshore Otway Basin and undeveloped resources such as Manta and Annie.
Disclaimer
This announcement may contain forward looking statements that are subject to risk factors related to oil, gas and associated businesses. The expectations reflected in these statements are believed to be reasonable. However, they may be affected by a variety of variables and changes in underlying assumptions which could cause actual results or trends to diverge materially, including in respect of: price fluctuations and currency fluctuations, drilling and production results, actual demand, reserve estimates, loss of market, competition in the industry, risks (environmental, physical, political etc.), developments (regulatory and fiscal etc.), economic and financial market conditions in Australia and elsewhere, changes in project timings, approvals and cost estimates.
COOPER ENERGY LIMITED 
