Cooper Energy Limited

Successfully Completed Sole-3 Flow- Back: Cooper Energy Limited (ASX: COE) has been successful in completing clean-up and flow back operations at Sole-3 gas well. With this news, the share price climbed up 8.451 per cent on July 06, 2018 with the trading volume of more than 12 Mn. According to the release, the clean-up and flow back test was conducted on the near-horizontal 97 metre completed section of the Top Latrobe Group sandstone reservoir over a 26-hour period and it was found that the well performance and reservoir deliverability are on track with pre-drill expectations. The flow rate was constrained by surface well test equipment to a maximum of around 48 MMscf/day, (million standard cubic feet per day) through a 104/64” choke. The management stated that the successful testing of Sole-3 marked an achievement of one of the key milestones for the Sole Gas Project. The company is currently well set and ready to go for production capability exceeding project requirements. After successful completion of Sole-3, the company will now proceed to resume Sole-4 and finishing the undertaking requirement.


Summary of Sole-3 development well flow back (Source: Company Reports)

On the financial front, the company enjoys cash-rich position with zero debt facility. The current ratio stood at 15.71x in 1HFY18 and average account receivable days substantially decreased from 866.6 days in 1HFY17 to 611.0 days in 1HFY18, reflecting strong management policy towards collection.

At its Otway hub, the group flagged for production uplift with Casino Henry joint venture commencing gas sales to Origin Energy under new contracts. At Gippsland, the portfolio was expanded with new well located acreage. Based on the developments, the group had enhanced its FY18 production guidance to 1.4 to 1.5 MMboe. Meanwhile, COE stock has risen 12.70% in three months as on July 05, 2018. Based on the foregoing, we uphold our “Buy” recommendation on the stock at the current price of $ 0.385.

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