Cooper Energy Ltd [ASX:COE] has experienced a 5.94% jump in their share price this morning, following the announcement of their new gas sales agreement with AGL energy.
The report details that this detail will position their Sole gas field (in Gippsland Basin) to become the nation’s newest source of gas supply. Also included in the agreement is their Casino Henry (Otway Basin) gas operation. This deal has been welcome news to COE shareholders, and will commence following the completion of the Orbost Gas Plant, currently undertaken by APA Group.
Cooper Energy shares are trading at $0.53 at time of writing.
How the sales agreement helps Cooper Energy Share Price
According to this morning’s announcement, Cooper Energy has successfully completed construction of the offshore Sole gas field, and APA Group will soon finish the upgrading of the plant in September this year. Gas sales from this plant can also be expected by then. This project will deliver an extra 68 terajoules (TJ) of natural gas for South-East Australia per day.
This is very exciting for the Australian small-cap. In March, they reported their quarterly revenue had increased by 43%, influenced by 2019 gas contracts, higher prices and increased output. And these new plans could only push their sales and cash flow higher.
They haven’t been in the natural gas game for long, only shedding oil from their portfolio in 2012. And it’s been welcomed with open arms for Southeast Australia.
The Gippsland Basin, in offshore Victoria, is believed to be a ‘competitive source of gas supply for South Australia’ and will be a great addition to their portfolio.
What does this mean for investors?
Potential or existing, this announcement is great news for this small-cap. With great results in their quarterly activities report, including $20.6 million in revenue, ongoing and promising exploration activity, as well as production up 14% from their prior quarter, we could be seeing Cooper Energy becoming a much heavier player.
And with their pricing still miniscule compared to its cousins, now could be a great time to jump into the stock.
Of course, things can change. But it looks like AGL Energy has great faith in them…
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