Another Indonesian well and six wells in the Cooper Basin, South Australia will follow.

Listed on the Australian Stock Exchange in 2002, Cooper had immediate success with the discoveries of the Sellicks, Christies and Worrior oil fields in 2002-03.

But this early production success had an enormous impact on the perception investors had of the company, focusing attention on the company’s Cooper Basin production and reserves, while obscuring the significant growth potential held in the company’s international exploration portfolio.

Scott argued that the company’s assets in Indonesia and North Africa mean it should be deemed a growth stock.

Its established reserves and production base have enabled the company to build an international exploration portfolio without calling on shareholders for further funding.

“After we had secured a few high value overseas projects, we began to realise that the risked value of our exploration portfolio was starting to exceed our Cooper Basin reserves portfolio,” he said.

“We considered that our market capitalisation was represented by our cash reserves plus the net present value of our oil reserves with absolutely no value attributed to our exploration assets.

“This surprised us, as many of our peers were all blue-sky with limited cash and no production.

“In the end we realised that although the small production we have in the Cooper Basin is successful, we needed to re-introduce ourselves to investors as a high potential growth exploration company with international assets that all have the potential to substantially change our value in a very short time frame.

“Some of the international permits we have accumulated, such as the South Madura PSC and the Seruway PSC, have enormous potential for growth.”

Cooper’s most recent addition to its exploration portfolio was in March, when it acquired unlisted Australian company Rion Energy.

This deal gives Cooper a 22.5% strategic interest in the Seruway Production Sharing Contract (PSC) in northeast Sumatra, Indonesia.

The Seruway PSC has several discovered gas fields and a large number of leads and prospects in a proven hydrocarbon region, including the undeveloped Gurame gas field, which has estimated recoverable reserves of 400 billion to 2.7 trillion cubic feet (Tcf) of gas and 20-150 million barrels (MMbbl) of condensate.

Cooper Energy’s reserves definitions classify the Gurame reserves as being “discovered static”, which means they have been discovered and are considered to be economic but are waiting for the field development plan to be defined and approved.

Gurame was discovered in 1967 and delineated between 1967-1972 when gas had limited commercial value in the region.

At this time, the field was poorly appraised, so there is considerable uncertainty over the reservoirs’ likely flow rates and in the quantity of hydrocarbons that could be recovered.

3D seismic has recently been completed on Gurame, and Cooper is planning to drill an appraisal well there later this year aiming to test the flow capacity of the reservoirs.

Should the reservoirs demonstrate reasonable flow rates, then Cooper is confident that it will have a major development on its hands. Based on technical evaluations, the well is considered to have an extremely high chance of being successful.

In addition to the Gurame gas field, the Seruway PSC also contains several other discovered undeveloped gas fields, as well as several other mature prospects plus a further 35 leads and prospects, all of which will require further seismic studies before reaching maturity for drilling.

These other leads and prospects are estimated to have a total recoverable reserve potential greater than 10Tcf of gas and 500MMbbl of condensate.

Cooper will also drill a second major impact well later this year – Kurnia-1 in the South Madura PSC, a block that covers the southern half of Indonesia’s Madura Island.

Cooper recently farmed out 15% of its 45% in South Madura to Nations Petroleum, a Canadian privately held oil and gas company with interests in California, Azerbaijan and Indonesia.

In the event of discovery, Nations has also offered to assist with development and production, which fits with Cooper Energy’s business strategy of maintaining a lean, low-cost operating organisation.

The farm-out gives Cooper Energy with a free-carry through Kurnia-1, providing the company with a saving of $US4.1 million ($A5 million) and a free-carry in the 2007 2D seismic program, a further saving of $1.5 million.

Cooper Energy will also receive a partial payment of back costs of $550,000.

This results in a package of financial benefits totalling $6.15 million.

As part of the total transaction, Cooper Energy will also take over 100% ownership of the South Madura Exploration Company, providing a low cost operating office in Indonesia and a base to aggressively pursue more Indonesian exploration and production opportunities.

The block lies immediately to the north of the Jeruk and Oyong oil and gas fields with the Kurnia-1 prospect situated in the south of the PSC.

The well has two target horizons: an upper horizon at about 1260m that is expected to contain gas within the Ngrayong sandstone and an oil target in the Kujung carbonate platform at 3020m.

According to Cooper, the Ngrayong gas prospect has the potential to yield 256 billion cubic feet of recoverable gas while the Kujung oil prospect has the potential to yield 199MMbbl of recoverable oil.

Other formation horizons in the well also have potential for significant hydrocarbons, and any gas finds are very likely to contain valuable condensate.

Cooper Energy also has a 100% stake in the Bargou Prospecting Licence in Tunisia, which contains a large number of leads and prospects with potential for commercial quantities of hydrocarbons.

“The Tunisia block is a bit of a sleeper at the moment in our exploration portfolio because it is very early days in its evaluation,” Scott said.

During the past year, Cooper has been collecting existing data and identifying leads and prospects at Bargou.

The company’s next step will be to acquire some regional 2D seismic this year and then some prospect-specific seismic in 2008 with the aim of drilling a well in 2009 or later.

“The block must have some attraction because we keep getting approached by third parties interested in farming in,” Scott said.

“But we consider it to be too early yet and we will probably add some further value before we consider any offers – unless the offers are too good to refuse.”

Scott said 2007 was shaping as a significant year for Cooper, with high-impact wells in the South Madura and Seruway PSCs plus further exploration drilling in the Cooper Basin to follow interpretation of a large 3D seismic survey in PEL92.

“One or more successes in any of our international or domestic projects could add substantially to our share price,” he said.

“It would reinforce that we are a growth stock with an outstanding international portfolio that is fully paid for by our cash and production.”