Cooper Reports 37% Surge in Oil Production
Australian-based oil and gas producer Cooper Energy Limited has begun to reap the production benefits of last year's Callawonga oil discovery in the Cooper Basin with the tie-in of the new field in November helping to underpin a 37% increase in net oil production for the December 2006 Quarter to 73,512 barrels (September Quarter: 53,681 barrels).
The strong quarterly production performance comes ahead of an active period for Cooper Energy in 2007, with the Perth-based Company moving towards drilling of the high-potential Kurnia-1 well in Indonesia, recently completing a major 3D seismic acquisition program in the Cooper Basin and planning an intensive exploration and development drilling schedule with the potential to add significant value for shareholders.
Complementing its core exploration and production focus in Australia and internationally, the Company also recently announced the acquisition of a strategic 6.64% shareholding in Sydney-based oil and gas company Mosaic Oil NL, deploying a portion of the available cash held by the Company. Cooper Energy views its shareholding in Mosaic as a strategic, long-term investment, and regards the business and assets of Mosaic as complementary to its own.
Production from the Cooper Basin operations generated oil sales of A$4.4 million for the December Quarter, representing a slight reduction on the $4.9 million generated in the September Quarter due to a lower oil price and stronger Australian Dollar.
Working capital remained strong at A$22.9 million at the end of the Quarter. Cash reserves were reduced to A$17.6 million (A$25.2 million at the end of the September Quarter), reflecting a number of large payments made during the Quarter including the acquisition of the interest in Mosaic Oil (A$5.14 million), a tax payment of A$1.9 million and development and exploration expenditure for the Callawonga-1 and Kurnia-1 wells.
The commencement of production from Callawonga-1, at an average rate of 1,448 barrels of oil per day, will assist in enhancing Cooper Energy's annual production volumes The Company has established a production budget of 275,000 barrels of oil for the full 2006/07 financial year and is currently on track to meet this target.
Callawonga was one of two new Cooper Basin oil discoveries during 2006 in PEL92, in which Cooper holds a 25% interest. The speed with which the Callawonga discovery was brought into production and the prospectivity of the area – which also hosts the producing Christies, Sellicks, Silver Sands and Worrior fields – underscores the potential for further additions to the Company's oil reserve inventory and future production in this prospective region.
Cooper Energy's Managing Director, Mr Michael Scott, said the recently completed 277km2 3D seismic survey in PEL92 represented a major step forward for exploration in the permit. "The large 3D seismic survey will be used to identify additional oil prospects close to the existing Christies and Sellicks fields, similar to the recent Callawonga and Silver Sands discoveries. Once identified, it is intended to drill these prospects later in 2007," he said.
"Internationally, our main focus is on the exciting South Madura Production Sharing Contract, where civil works commenced during the Quarter to prepare access and drilling pad preparation for the forthcoming Kurnia-1 well," he added. The Operator is in the process of locating a suitable rig to coincide with the casing delivery in March 2007, with a firm spud date to be announced once the rig has been contracted.
"Kurnia-1 is a potential company making well and will target undiscovered reserves of 256 billion standard cubic feet of recoverable gas and 199 million barrels of recoverable oil (both estimates at a P50 confidence level)," Mr Scott said.
"With a strong balance sheet, a strong production base in Australia, an exciting domestic and international exploration portfolio and a strong focus on generating shareholder value, 2007 will be an important year for Cooper Energy in which we will seek to elevate the Company to the next level within the junior oil and gas sector in Australia."
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