Cooper has finalised its development plan based around two wells that will not only give it a change to increase reserves, but will ensure redundancy in production so Sole doesn't suffer the same indignities as the shut-in Longtom field.
The company says it is now in the process of finalising financing for the development of the 25 petajoule per annum field from 2019 ahead of a final investment decision within weeks.
"We now have the project and the commercial relationships that reduce technical and construction risks substantially, reduces the capital requirement for Cooper Energy, increases gas resources and offers the potential for increased production in the all-important early years," managing director David Maxwell said this morning.
The company has been working since October to market the additional gas it recently acquired with Santos' Victorian portfolio and finalise the best options to see Sole finally developed.
"We are delighted at the opportunity to join with APA in developing our Gippsland Basin gas as provided for by the heads of agreement announced today," he said of the decision to offer APA the opportunity to run the Orbost gas plant," Maxwell said.
"Their involvement will strengthen the project further and enable Cooper Energy to concentrate our efforts on exploration, upstream development and production and gas commercialisation."
Cooper will retain 100% of the upstream project while, if the HoA comes to fruition, APA will acquire, upgrade and operate the Orbost plant, which is envisaged to become a hub for other new gas projects such as the nearby Manta gas field.
APA will enter into a gas processing agreement for both Sole and Manta, and will be open to treating third party gas.
APA managing director Mick McCormack said the group had been seeking opportunities to fund and develop new projects in the midstream infrastructure sector.
"Acquisition and development of the Orbost Gas Processing Plant represents a significant opportunity for APA to expand this aspect of its business," he said.
"We believe that the Sole gas project has the potential to be a source of significant new gas supply to the eastern Australian market."
Cooper secured a stake in Orbost when it purchased its initial share in Sole with Santos in 2014, and has since moved to 100%.
Selling it means the company avoids expected expenditure of around $250 million, and frees up Cooper's cash to fund the development work, such as the two wells and the associated pipelines and subsea infrastructure, around $355 million.
Cooper said the decision to access the field with two wells would open up 249PJ, 7PJ more than with a single well development.
The drilling will cost $140 million, compared to $83 million for the single well option.
The two wells will be able to produce 74 terajoules of gas per day, more than the 68TJpd Orbost facility can handle at the moment.
Long lead items have been ordered which include the shore crossing pipe and installation contract, subsea tree and wellhead and downhole tubing, and Cooper has been offered a production licence over VIC/RL3.
Cooper has gas sales agreements with AGL Energy, EnergyAustralia, Alinta Energy and OI Australia for 20PJpa, with 5PJpa being retained for contracting into the short term and spot market.
Cooper this morning also announced a statutory loss after tax of $8.2 million for the first half of the fiscal year, improved from a loss of $34.1 million in 2016, during the worst of the oil rout.
Just over half of the loss was associated with costs from its decision to withdraw from its interests in Tunisia and Indonesia to focus on Victoria and South Australia.
Maxwell said the company was now getting all of its sales from Australia, and production estimates had tripled to around 1MMboe this year with the new Santos additions, while reserves increased eleven-fold to 11MMboe.
"We are now set for significant growth this year, which is expected to be the first instalment in a 6 year growth trajectory offered by our existing assets. Based on current plans and equity interests, this can take our production from last year's output of 300,000 boe to exceed 10MMboe by 2022," he said.