Morgans believes the acquisition by Cooper Energy of the Orbost Gas Plant from current owner/operator APA Group ((APA)) for -$270-$330m makes sense. It’s thought gaining control will allow Cooper Energy to apply more funds to debottlenecking.
To fund the acquisition and the abandonment of the Basker Manta Gummy oil development, the company has raised $244m of equity at 24.5c (via a placement and 2-for-1 underwritten rights issue), and added $200m in new debt.
The broker lowers its target price to $0.31 from $0.35 and retains its Add rating.
Sector: Energy.
Target price is $0.31.Current Price is $0.24. Difference: $0.07 – (brackets indicate current price is over target). If COE meets the Morgans target it will return approximately 23% (excluding dividends, fees and charges – negative figures indicate an expected loss).
