A profitable shift in focus

WITH a strong working capital of $68 million and no debt, Cooper Energy has announced in its half yearly report a 137 per cent increase in consolidated profi t from its continuing operations to a total $8.3
According to the company, the profit was derived from the production of 225,291 barrels of oil and a 40 per cent increase in sales revenue to $25.8 million. Cooper Energy managing director David Maxwell said in a statement that in the past four months, the company had shifted its focus to its highly profi table Cooper Basin business and to the exploration of new prospects.
“We look forward to pursuing several potential game-changing opportunities in 2012, including both unconventional and conventional gas opportunities in the Otway Basin (PEL 495), as well as the commencement of drilling at the Hammamet West-3 well in Tunisia in the December 2012 quarter,” Mr Maxwell said. Cooper owns a 50 per cent interest in the PEL 495 permit area and is being free carried by farm-in partners Beach Energy and Beach subsidiary Somerton. In a media presentation in mid-February, Mr Maxwell said that the licence was a dual opportunity for conventional and shale oil plays.
“[PEL 495 is] expected to be drilled – at the moment we’re thinking June, but that may slip into the third quarter of this year depending on rig availability,” Mr Maxwell said.
In Tunisia, Cooper agreed to a farm-out agreement with Dragon Oil whereby Dragon will earn a 55 per cent stake in the Bargou permit by funding 75 per cent of the first US$26.6 million of exploration drilling.
Preparations have started for the drilling of the Hammamet West-3 well which is expected to spud in the December quarter of 2012. A 600 square kilometre 3-dimensional marine seismic survey has been completed in the western portion of the Nabeul permit, planned to be available for interpretation during the September quarter of 2012. The company’s half yearly report also stated that its share of oil production capacity in the PEL 92 area of the Cooper Basin increased to more than 1500 barrels of oil per day as a result of additional road transport and the reinstatement of the Tantanna to Gidgealpa oil pipeline.
The company reported that a nine-well exploration drilling program on the permit had been completed, resulting in three new discoveries – Rincon, Germein and Elliston. In line with its strategic focus, Cooper reported that it had reduced its international exploration expenditure and commercialisation of non-core international assets: it divested its interests in Romania in November last year and is reviewing assets held in Indonesia and Poland. Mr Maxwell said at the presentation of the report that he expected to be able to announce plans relating to the assets by June.
“They have, particularly in Poland, reasonable capital demands. That capital can be much better deployed, in our case, in opportunities in Tunisia, the Cooper and the Otway [Basins],” he said. “It’s really about focussing the portfolio to where we’re going to get the greatest leverage…in a fi nancial sense, I don’t expect big dollars to come out of this. It will be [in the] single digits millions.”

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