Cooper Energy has reviewed its asset values, with managing director David Maxwell confident that uncontracted south-east Australian gas is favourable in the coming years.
The company’s analysis and that of independent analysts suggest the forecast 2022-23 tightening gas supply in south-east Australian will be exacerbated by the industry’s capital expenditure cutbacks in 2020 and 2021.
Cooper Energy’s un-contracted gas is located in the offshore Otway Basin, with supply from the Sole gas field largely contracted.
Maxwell said the company’s activity during the year in prosecuting development and abandonment projects has informed the review of carrying values and provisions.
“The impairments have been made to align our asset carrying values with 2020 prices, costs and expectations. Price assumptions for un-contracted gas have been revised to reflect the lower, post-COVID-19 prices currently prevailing and anticipated for the 2021 financial year, increasing thereafter,” Maxwell said.
“For our un-contracted gas, the impacts of adopting current prices has been significant as Victorian spot prices at June 30, 2020 were 50 per cent lower than 12 months earlier.”
Gas production from the company’s Casino Henry oil and gas asset is fully contracted for 2020 and largely contracted for 2021.
Development cost estimates have been updated for revisions to development costs for Henry within the Otway phase three development project analysis and Athena gas plant costs.
The Sole asset was tested for impairment including assessment of the impact of the current and ongoing delays to the completion of the Orbost gas processing plant, which indicated the recoverable amount for Sole exceeded the asset’s carrying value.
Cooper Energy reported that the PEL 92 area comprises of an exploration asset for the area of interest comprising non-producing areas and oil assets for producing areas.
The PEL 92 joint venture is focussing on its capital investment on development of existing producing fields and operations.