Australia-based Cooper Energy says that it has reached the Final Investment Decision (FID) in the Sole gas development offshore Victoria having secured A$400m ($317m) worth financing to fund the project.
The gas project will see the development of the Sole gas field in the Gippsland Basin with an objective to begin supply of gas to the south-east part of Australia from 2019.
Cooper Energy, which holds 100% stake in the Sole gas field, will invest A$355m ($281.5m) for the offshore gas project which includes a subsea pipeline to transport gas to the Orbost Gas Plant.
Development of the Sole gas field is expected to lift Cooper Energy’s proven and probable reserves by 362% with the addition of 43 million boe.
The finance package secured by Cooper Energy features a debt facility of A$250m ($198.2m) from the Australia and New Zealand Banking Group (ANZ) and Natixis’ Hong Kong Branch. It also includes a working capital facility from ANZ along with a fully underwritten accelerated non-renounceable entitlement offer to raise nearly A$135m ($107m).
Cooper Energy managing director David Maxwell said: “The fully underwritten debt facility from major banks, ANZ and Natixis, underscores the quality of the Sole project and of the other opportunities in our portfolio which includes 112 PJ of uncontracted gas, as well as the Manta opportunity, in south-east Australia.
“Gas prices have consolidated in recent months and this, together with the ongoing enquiry levels for our uncontracted gas, provides high confidence in the business case for incremental development of our existing gas operations”.
As per a previous agreement, APA Group will acquire the Orbost Gas Plant and upgrade it with an investment of A$250m ($198.2m). It will also operate the strategically located plant to process gas sourced from Sole and other fields.
According to Cooper Energy, the financing and FID have satisfied an important outstanding condition precedent of the company’s agreement with APA Group and its gas supply contracts with AGL Energy, EnergyAustralia, O-I Australia and Alinta Energy.