Cooper Energy Share Price [ASX:COE] Up after Finishing Works at Orbost

Cooper Energy Ltd [ASX:COE] is up today over 4% at time of writing after announcing they’ve completed reconfiguration works at Orbost Gas Processing Plant (OGPP).

Cooper Energy is an oil and gas explorer, developer and seller. Their revenue comes from supplying gas to southeast Australia and oil production in the Cooper Basin. Their clients include AGL Energy, Alinta Energy, Visy and Origin Energy among others.

What happened?

OGPP run into some problems earlier this year that prompted the works.

As the company explained:

The plant is owned and operated by APA Group [ASX:APA], who bought it from Santos Ltd [ASX:STO] in 2017, and processes gas from Cooper Energy’s Sole gas field in Gippsland.

Cooper Energy have said they’ve finished the works on time and have started to supply gas to industrial customers. The company has a long-term gas supply contract with Visy that was scheduled to start on 1 December, but with OGPP out of commission they had to source from elsewhere until yesterday.

As of 6:00am this morning the plant was producing at the equivalent of 25 TJ per day.

What could happen next?

Cooper Energy expects they’ll be able to increase OGPP production rates ‘in a sustainable and controlled manner’ before other customer contracts start in January. At this point the company has annual contracts in place to supply 19.75 PJ per year, or about 54 TJ per day, double what’s producing today.

At time of writing Cooper Energy is trading at 38 cents.

While the company has delivered some good news today, they haven’t had a great year. Their share price is down by 37% since the beginning of the year. Even after increasing production, they recorded an $86 million loss for the year after having to write-down $107 million in assets.

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 Selva Freigedo

Selva Freigedo is a research analyst for The Rum Rebellion.

Born in Argentina, her passion for economic analysis started at a young age. Her father was an economist for the Argentinean governments and the family used to discuss politics and economics at the dinner table.

Argentina is a country with an unusual economic history. Growing up there gave Selva first-hand experience on different economic phenomena such as hyperinflation, devaluation and debt default.

Selva has also lived in Brazil, Spain and the USA.

Back in 2000 she was living in the US as the dot com bubble popped…
And in 2008 she was in Spain as the property market exploded and then collapsed…

She has seen first-hand what happens when bubbles burst.

Selva joined Fat Tail Investment Research’s team in 2016, as an analyst. She now writes from her vantage point in Australia, where she settled in 2015.

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