director buys more, page-5

Yes that does sound great!

Here is a bit of what he said.

Earlier this week you advised that production testing of the Hammamet West-3 well (in the Bargou Permit, COE 30%) was expected to commence after gas and oil indications were encountered during drilling of a near-horizontal well bore. Will the result of the well have any implications for the decision to divest your Tunisian portfolio, announced to the ASX in June?
Managing Director David Maxwell

"The plan for Tunisia remains unchanged. We always planned to commence the divestment after the results of Hammamet West-3 were known. The results to date have been very encouraging in that the horizontal section has intersected fractures and we’ve had numerous gas and oil shows. At present, we are preparing to do a production test; this is being done earlier than we’d previously planned in that we haven’t yet reached the primary target – but in view of the hydrocarbon shows and fractures we have encountered, it made sense to proceed to production testing now.
The Tunisia portfolio, of which the Bargou Permit is one of three permits, is a valuable portfolio and already the results from Hammamet West-3 are supporting our view of the value of the asset. Clearly, a successful production test, which means sustainable hydrocarbon flow, would further reinforce our view on value, but our plan to divest will remain unchanged".

Would you consider retaining the asset if the well is successful?

Managing Director David Maxwell
"The objective of divesting the Tunisian portfolio is to maximise the return for our shareholders, as it is clear that the assets have much greater value for a natural owner of African and Mediterranean exploration acreage. Given this basis for the decision, we have no plans to retain the portfolio. However, in evaluating any offers we’re always going to be driven by the offer structure and our assessment of what can provide the best return for our shareholders."


What have the interest levels been in the Tunisian portfolio and when do you expect the divestment process to conclude?

Managing Director David Maxwell
"The divestment process won’t commence until after Hammamet West-3 is completed and we expect that to be some time in August. To date we’ve received a lot of interest from international and Australian companies and we anticipate this interest will increase with time, particularly if the Hammamet West-3 production test is successful.

In addition to Hammamet West-3, there are numerous material exploration and development opportunities in our three Tunisian permits and some of them are very similar plays to Hammamet West-3.
We expect the divestment process to take three to four months and, on that basis, it’s likely to be complete by December 2013 or soon after."

While you have announced the sale of your Tunisian portfolio, you are retaining a presence in Indonesia where Cooper Energy holds three permits and produces approximately 300 barrels of oil per day. Given your strategic focus on the Australian energy market, what is the rationale for your involvement in Indonesia?

Managing Director David Maxwell
"The Indonesia portfolio has a range of attractive oil and gas exploration and development opportunities. We see plenty of opportunity to add production, reserves and value at relatively low cost and therefore it’s good business for our shareholders to add this value first, before we then consider our longer term strategy in Indonesia.
The development and production costs in onshore Sumatra, which is where our portfolio sits, are relatively low by international standards and therefore the cash and the economic returns from our Indonesia permits are very attractive on an international basis."

Your strategy involves growing your foundation assets and investing in one or two “game changers” per year at low cost. Where do you expect to see the “game-changing” opportunities arise?

Managing Director David Maxwell
"At present we have a number of “game-changer” opportunities. Firstly, in the Otway Basin the Casterton Shale has strong fundamentals; it’s well located to supply the available gas markets, gas prices are increasing and we expect liquids content from this shale. Secondly, Tunisia and in particular the Hammamet West-3 well that’s currently being drilled and which we’re about to production test. Thirdly in Indonesia, the Merangin III PSC, which we hold 100% at the moment, has some very material and valuable oil and gas targets and these targets have already attracted the attention of some large international companies.
In addition to those three opportunities, given our cash and financial assets of A$71.2 million and our strong cash flow, we’re in a position to evaluate a number of acquisition opportunities that are focused on Australia and that would add value for our shareholders."