Australian company Cooper Energy fell into the red during the first half of the 2019 financial year as costs offset a rise in revenues.

Cooper posted a loss of A$12.6 million (US$9 million) for the six months to 31 December, compared to net profit of A$19.8 million during the same period a year earlier.

Weighing on results for the current financial year, which ends 30 June, was a loss on “significant items” totalling A$15.7 million, largely related to a A$16.5 million increase in restoration expense arising from reassessment of provisioning for the rehabilitation of the non-producing Patricia Baleen gas field.

In comparison, the first half of the 2018 financial year benefitted from a A$17.6 million gain from significant items related to the sale of the Orbost gas plant in Victoria.

Taking into account the one-off costs, Cooper’s underlying profit was actually up 41%, from A$2.2 million to A$3.1 million.

Improving the underlying results was a 16% jump in sales revenue, to A$36.2 million, which was driven by a 32% rise in gas sales revenue, to A$25.6 million, offsetting a decline in lower oil revenue.

“In 2018 we replaced legacy gas contracts with new sales agreements in line with market prices,” Cooper managing director David Maxwell said.

“Our revenue from gas rose 32% and drove the increase in underlying EBITDA and net profit we have reported today. This process is ongoing, as another round of agreements commenced on 1 January this year and we are currently negotiating gas sales agreements for uncontracted gas to be produced from Sole start-up and beyond.”

He added the Sole gas project, off the coast of Victoria, was 86% complete as of 31 December, with the field on track to produce first gas for commissioning of the upgraded Orbost gas plant in June which will be followed by plant performance testing and first sales in July.

Maxwell also confirmed Monday the company was set to deliver the project in line with its A$355 million budget which had enabled a redetermination of the company’s finance facilities.

“We will be using the funds released to help fund the Otway basin exploration drilling which we have accelerated into the current year,” he added.

“The prospects to be drilled are low risk, low-development-cost and can be tied into our Otway basin infrastructure and are capable of delivering the next wave of growth after Sole.”

It was revealed last month Cooper had secured the semi-submersible Ocean Monarch for a two-well exploration campaign which will include wells on the Annie and Elanora prospects which are believed to hold best estimate prospective resources of 71 billion and 100 billion cubic feet, respectively.