Cooper Energy : FY16 Results Release 15 August 2016

15 August 2016

• Statutory loss after tax of $34.8 million after significant non-operating items of $32.0 million
• Underlying net loss after tax of $2.8 million (pcp: loss of $1.3 million)
• Positive operating cash flow of $7.9 million (pcp: $2.0 million)
• Cash and financial assets of $50.8 million at 30 June, up from $41.3 million
• Sole gas project: FEED near complete and foundation sales contracts in place
• Reduced cash costs: oil operating costs down 19%; general administration costs down 9%
• Conference call 9 am EST, 15 August, details on page 3

Cooper Energy Limited ("Cooper Energy", ASX: COE) has announced its financial results for the 12 months to 30 June 2016 ("FY16" "2016"), reporting a smaller statutory loss, increased cash generation and a stronger balance sheet.

The statutory loss after tax of $34.8 million was recorded after significant non-operating items of $32.0 million after tax, the major portion of which were impairments announced in the FY16 first half accounts. The significant non-operating items include: impairments made in respect of the Indonesian assets sold or contracted for sale during the year; impairment to the carrying value of onshore Otway Basin exploration expenditure; and impairment to northern Cooper Basin oil exploration expenditure; and provision for the Nabeul Joint Venture exit. The statutory loss compares with the previous year's loss of $63.5 million, which was also affected by impairments.

Exclusive of significant non-operating items, the company reported an underlying loss after tax of $2.8 million compared with the underlying loss of $1.3 million in FY15, with the movement due mainly to lower oil prices partially offset by oil price hedging and cost reductions. The average oil price of A$60.75/bbl (including hedge benefits of $5.54/bbl) was 29% lower than the 2015 comparative of A$85.56/bbl. Sales revenue for the period of $27.4 million was down from $39.1 million with 97% ($11.3 million) of the reduction attributable to lower oil prices.

Oil production for the year of 0.47 million barrels was marginally lower than the previous year's figure of

0.48 million barrels, and largely replaced by reserve additions during the year. Proved and Probable Reserves at 30 June1 was 3.0 million barrels compared with 3.1 million barrels at the beginning of the year.

Cooper Energy Managing Director David Maxwell said "the stand-out features of the year's result were the progress of the development of the gas projects, the robust performance of the company's oil business in a low price environment and the management of costs and safety. Zero recordable incidents in nearly a million hours worked is an excellent result and the standard we aspire to maintain.

1 Reserves and Resources attributable to Cooper Energy at 30 June 2016 were detailed in an earlier announcement to the ASX dated 15 August 2016

"Our oil operations were profitable and cash generating despite the reduction in the average oil price we received" he said. Gross profit as a percentage of sales revenue has been maintained at 36% through zero cost hedging and lower cost of sales.

Cash operating and general and administration costs were reduced significantly during the year. Operating costs of A$29.71 per barrel were 19% lower than the FY15 comparative of A$36.76/bbl. General and administration (G&A) cash costs were reduced 9% from $10.8 million to $9.9 million, which included the G&A costs incurred in advancing the Gippsland Basin gas projects. The company generated a cash flow of $7.9 million from operating activities, up from $2.6 million in FY15.

"While the additional expenditure on building a gas business resulted in the small underlying loss, our progress is clear and substantial. The company is fast approaching an investment decision on our first gas project at a time when additional sources of gas supply for south east Australian customers are being keenly sought".

"Front end engineering and design of the Sole gas project is nearly complete and we are preparing for a final investment decision" said Mr Maxwell.

Cooper Energy holds a 50% interest in Sole with the balance held by the Operator, (Santos Ltd). Sole gross Contingent Resources (2C) are assessed to be 241 PJ2 and gas production of 25 PJ pa (gross) from 2019 onwards is planned.

"The outlook for gas demand and prices is highly favourable for the economic development of Sole and our dialogue with gas buyers is affirming this. Having secured Heads of Agreement with AGL and O-I Australia for the project's foundation gas sales, we can take a flexible and patient approach in future contracting to optimise returns while supporting project financing" he said.

The company held cash and investments of $50.8 million at 30 June, up from $41.3 million. The balance sheet has been strengthened by an oversubscribed institutional placement, a share purchase plan and the proceeds from the sale of Indonesian exploration acreage. Divestment of the remaining Indonesian assets announced on 7 June is expected to be completed on receipt of regulatory approval.

Mr Maxwell said the company expected the exit from the Bargou permit offshore Tunisia in the near future and this will be a milestone in the company's strategy execution. "For the first time in 12 years, the Cooper Energy portfolio will be completely focussed on Australia.

"We will be busy in the coming months as the various workstreams for the Sole gas project are completed and coalesce into an affirmative final investment decision.

"Collectively these events will complete the transformation of Cooper Energy we began five years ago. The company will be an Australian focussed oil and gas company with significant opportunity and exposure to the south east Australian gas markets. It's an exciting time for Cooper Energy and we are resolved that our shareholders get the optimal results as we execute the remaining work program" he said.

Based on existing assets and plans, the company anticipates oil production of 240,000 to 280,000 barrels from its Cooper Basin permits in FY17.

2 100% joint venture Contingent Resources (2C) for Sole gas field dated and announced to the ASX on 26 November 2015. Cooper Energy is

not aware of any new information or data that materially affects the information provided in that release and all material assumptions and technical parameters underpinning the assessment provided in the announcement continues to apply.