Australian oil and gas company, Cooper Energy, has announced its second gas supply agreement for the Sole gas field, off Australia, and its first commercial agreement for the nearby Manta field with the signing of a binding heads of agreement with AGL Energy.
The agreement, which is subject to an affirmative Final Investment Decision (FID) provides for the supply of up to 53 PJ from Sole over 8 years, together with options for a two year extension and for supply of up to 4 PJ per annum from Manta.
Cooper acquired 50% interest in Sole gas field and Orbost Gas Plant in December 2014, and completed the acquisition in May 2015.
Sole is currently the subject of Front End Engineering and Design (FEED) for a FID around the September quarter 2016. Cooper Energy and Santos Limited each hold a 50% interest in Sole and the Orbost Gas Plant which is planned to be used to process gas produced from Sole.
“We are very pleased to secure agreement with AGL on what is the cornerstone sales agreement for Sole,” said Cooper Energy Managing Director David Maxwell.
“AGL is among Australia’s most important energy suppliers and we are delighted to have them as one of our customers in a growing gas portfolio.”
According to Cooper, AGL Energy is one of Australia’s largest energy companies, with annual gas sales of more than 230 PJ to retail, business, wholesale and power generation customers. Under the agreement, Cooper Energy will supply AGL with up to 6.6 PJ per annum. Current schedules anticipate first gas from the Sole gas project in the January quarter of 2019, Cooper said.
Cooper Energy now has a total of 73 PJ of its Sole gas subject to sales or extension agreements, which is 60% of the company’s 2C contingent gas resources1 of 121 PJ in the field. Maxwell said that the AGL contract was an important milestone in the path to an affirmative Final Investment Decision for Sole.
“The AGL contract, together with our HoA with O-I Australia, has us well on track to secure commitments for around 80% (10 PJs) of our share of Sole gas production prior to FID,” he said.
The Sole gas field is located in VIC/RL3, offshore Victoria, approximately 62 kilometres from the Orbost Gas Plant, onshore Victoria.
The field has been assessed by Cooper Energy as containing a 2C contingent gas resource of 241 PJ1 (100% joint venture) of which Cooper Energy’s share is 121 PJ. An affirmative FID for the Sole project will crystallise the translation of these Contingent Resources to Proved and Probable Reserves.
On current equity levels, Cooper Energy anticipates the booking of Proved and Probable Reserves from Sole would deliver a 20 million barrel of oil equivalent uplift to Cooper Energy.