Australian oil and gas company Cooper Energy expects to make a decision on debt financing for the Sole gas project off Australia within next month.
The project will develop the Sole gas field located in VIC/ L32 in the Gippsland Basin offshore Victoria to supply 25 PJ per year to gas users in south-east Australia. Cooper is the 100% interest holder in the Sole field.
Following an approval to proceed with the project in late March, the company informed on Monday it is pursuing a dual stream process to identify and secure the optimal financing for the Sole gas project and Cooper Energy shareholders. The options under consideration include senior bank project finance and senior secured bonds, the company explained.
In respect of project finance, Cooper Energy noted it is continuing the engagement with the senior bank market which started some months ago as part of this process.
The company added it also remains engaged with international capital markets to assess availability and suitability of finance from the issue of senior secured bonds as announced in late June.
The project’s Final Investment Decision (FID) is now only subject to securing satisfactory funding.
Cooper Energy Managing Director, David Maxwell, said: “We expect to make a decision on our preferred source of debt funding within August, having regard to optimizing our capital structure and value for shareholders. The timelines associated with our financing process remain consistent with our timeline for first gas from the Sole project.”
Gas produced from the field will be piped to the Orbost Gas Plant, from where the gas will be supplied to customers through the Eastern Gas Pipeline. Cooper Energy has secured long term gas sales contracts with a portfolio of customers, including AGL, EnergyAustralia, Alinta Energy and O-I Australia, to support development of the field whilst retaining a share of annual output for availability to supply shorter term sales.
The capital cost of the Sole upstream development is estimated to be approximately $355 million, inclusive of the cost of drilling and completing two wells. This figure does not include the Orbost Gas Plant upgrade to be conducted by APA at an estimated cost of approximately $250 million.
Cooper already awarded a contract for the subsea tie-back of the Sole well to the Orbost Gas Plant, including the fabrication and installation of 64km of pipeline, spool and manifold, along with installation of a 64km umbilical and the commissioning of the system to Subsea 7. Offshore operations will start in 2018. The rig contract has been awarded to the Diamond Offshore-owned semi-submersible drilling rig, the Ocean Monarch, which is scheduled to start in March 2018.
First gas from the Sole gas project is planned to be delivered to the Orbost Gas Plant in the March quarter of 2019.
Offshore Energy Today Staff