Cooper Energy has entered into agreements with leading Australian energy infrastructure businesses APA Group to acquire the Orbost gas processing plant (OPP). The acquisition will cost between $270 million and $330 million via four instalments.
Additionally, Cooper Energy will also undertake a fully underwritten $244 million equity offering comprising of an $84 million placement to institutional investors and a 2-for-5 accelerated, non-renounceable entitlement offer to raise a total of $160 million.
The upfront payment to APA Group is set to be $210 million followed by a series of deferred payments. The first post-completion payment of $40 million will be provided within the initial 12 months, by the date on which ownership of OGPP transfers from APA to Cooper Energy.
A second post-completion payment of between $20 million and $40 million within 24 months of completion must also be met.
Lastly, the third post-completion payment of up to $40 million will be acquired by APA within 36 months of completion.
The final amounts of the second and third post-completion payments are subject to post completion plant performance and as such will be calculated once APA ceases operating the OGPP.
Currently, the book value of the OGPP is estimated to be $236 million. The proceeds of the sale are expected to exceed the current book value plus the remaining forecast capital expenditure of the OGPP.
Completion of the transaction is set to occur late July 2022. However, the agreement is conditional on the completion of a minimum capital raising by Cooper Energy within 60 calendar days after signing. Additionally, the agreement also includes provisions for the transfer of material licences and contracts that are in connection with OGPP.
APA Group will remain the operator of the plant in the period between the financial close date and the date on which the major facilities licence has been transferred from APA Group to Cooper Energy.
Following the acquisition, Cooper Energy will operate three gas fields and two gas plants supplying domestic gas into the highly attractive South-east Australian gas market.
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