Ann: Cooper Energy H1 FY24 results presentation, page-36

Cooper Energy upgraded on cost-out, potential for OrbostMeanwhile, Jarden Research has upgraded Cooper Energy (ASX:COE) from Underweight to Neutral, with a 12-month price target of 19c (versus current price of 16c).Cooper is a $420m market capped Australian gas and oil producer focusing on domestic markets.Jarden has upgraded Cooper after the company announced good progress in its cost-out programme and Orbost production performance.Cooper recently said the decommissioning of the Basker Manta Gummy (BMG) oil/gas fields will be completed in late March or early April. Cooper stated that, other than some lost time due to weather, it remains well on track to complete the programme within the revised $240-280m cost estimate.Jarden says COE has made good progress in reducing its production expenses and general costs.“The annualised run-rate of the cost-out programme as at January 2024 was ~$8m p.a, and COE has outlined plans to increase this cost-out target to $16m p.a. run-rate by end-FY24,” said Jarden.At the Orbost gas processing plant, which transports gas into the NSW and Victoria markets, Cooper has been working through options to achieve higher average rates since taking over operatorship of the plant in May 2023.In the most recent update, Cooper reported that ongoing signs of sustained performance improvement is evident at Orbost, with average production rates since the start of the year of 55.2 TJ/d vs the 47.4 TJ/d average rate in the last half.“As a sensitivity, a sustained increase to 60 TJ/d would increase our valuation by a further 1 cent per share,” said the note from Jarden.Jarden says the key risk for investors remains the successful execution of the BMG abandonment programme within the $240-280m targeted budget by early May 2024.“But, with solid progress now being made to date, we are increasingly optimistic COE can meet this objective,” Jarden said.