The ASX oil and gas player downgraded its FY21 production guidance this morning.
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The Cooper Energy Ltd (ASX: COE) share price is back where it started today following the company’s announcement it has cut its FY21 production forecast.
At the time of writing, the Cooper Energy share price is trading flat at 26 cents after falling to an intraday low of 25 cents this morning.
What did Cooper Energy announce?
The oil and gas exploration company provided an update to full year FY21 guidance and cut its previous production forecasts.
Cooper’s sales volume guidance is approximately 3.0 millions of barrels of oil equivalent (MMboe). The previous guidance was towards the middle of the 2.9 – 3.1 MMboe range.
In addition, it now sees production of 2.6 MMboe. This is down from the previous guidance of the lower end of 2.7 – 2.9 MMboe.
The company also gave capital expenditure guidance at the low end of $35 – $40 million, which is in line with previous commentary.
In the statement released this morning, Cooper Energy said:
Production from the Sole gas field in the Gippsland Basin has been constrained due to fouling within the sulphur absorbers of the Orbost Gas Processing Plant (owned and operated by APA Group (ASX: APA)). Notwithstanding the gas processing issues, all Sole customer nominations have been met to date, with gas supply sourced from Cooper Energy’s back-up supply arrangements when required.
Regarding production headwinds:
The increased seasonal gas demand and storage withdrawal is mainly due to the increased demand for gas-fired generation to offset the curtailment of electricity generation at the Yallourn Power Station.
A key benefit of processing CHN gas in the Athena Gas Plant2 is that gas supply will be on a firm basis. The plan is for the Athena Gas Plant to be commissioned in Q2 FY22.
Cooper Energy share price snapshot
The Cooper Energy share price is having a difficult year. It fell 35.75% over the first six months of 2021 and is down 7.14% over the past month alone.
It has a market capitalisation of $407 million, with 1.63 billion shares outstanding.
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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.