Cooper Energy, an Adelaide-based energy exploration and production company, has bought into a major gas and liquids project in the offshore Gippsland Basin.
The company will also be appointed operator for the Basker/Manta/Gummy gas and liquids project (BMG).
In a statement to the stock exchange today, the company said it has agreed to purchase a 65 per cent interest in BMG through part-acquisition of production licences.
“As a result of the acquisition, Cooper Energy will have the majority interest in a significant gas and liquids resource considered likely to be a competitive conventional source of gas supply for eastern Australia in the coming years,” the statement said.
The Gippsland Basin is one of Australia’s most prolific hydrocarbon provinces.
It’s located about 200km east of of Melbourne and a network of pipelines brings produced hydrocarbons to the onshore petroleum processing facilities near Longford.
A new network of pipelines distributes Gippsland Basin gas to customers in Victoria, Tasmania, New South Wales and South Australia.
The acquisition, which is effective from 1 January 2014, is subject to regulatory approval.
The BMG project contains undeveloped liquids-rich gas and oil which Cooper Energy intends to review and quantify to include in its year-end review and estimate of reserves and resources.
The BMG fields were previously developed for oil production and have been in a non-productive phase since 2010.
The infrastructure not required for a subsequent gas and liquids development and production phase has been removed.
The infrastructure relevant to produce gas and the remaining oil, including sub-sea facilities, has been retained and maintained.
Cooper Energy Managing Director David Maxwell said BMG’s proximity to existing infrastructure and developed and undeveloped gas fields was favourable for the prospects of commercialisation and consistent with the company’s gas strategy.
“The eastern Australian gas market is developing as we anticipated, the gas supply outlook is becoming increasingly tight and the upstream gas prices are increasing,” Maxwell said.
“We believe that the BMG joint venture has the right features for a new foundation economic gas supply to the eastern Australian gas customers in the medium term.
“BMG is a conventional gas source, with some infrastructure in place and the potential for economic enhancement through coordination with adjacent developed and undeveloped fields.
“We believe BMG can be a highly competitive source of supply for gas customers and good business for shareholders at recent and anticipated gas prices.”
Cooper Energy’s BMG interest is complemented by its 22.9 per cent shareholding in Gippsland Basin explorer Bass Strait Oil Company Limited (BAS), which holds a number of permits in close proximity to BMG.
“The Gippsland Basin is, and has long been, the largest source of gas supply for eastern Australia customers,” Maxwell said.
“Its significance can be expected to grow in the coming years as eastern Australia gas customers seek new competitive sources of supply with the right volume, price and delivery timelines for emerging contract needs.”
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