While new Santos CEO Kevin Gallagher insisted in August he was under no pressure to sell assets to prop up its balance sheet, this morning's announcement for cash consideration of up to $82 million is a drop in the ocean considering its net debt still stood at $US4.5 billion ($A5.92 billion) at the end of the first half of 2016.

The deal follows Santos' sale of its interest in the Kipper gas field for a more substantial $A520 million.

It also makes Cooper a 100% owner in the Sole field offshore Gippsland Basin, enabling equity partners to take a hefty stake in the project and Cooper can still keep a substantial amount of it.

This morning's announcement involved Santos selling its 50% interest in the Casino-Henry gas project, 50% interest in the Sole gas field and the Orbost gas plant 62km away, 10% in the Minerva gas field and plant, and 100% interest in the Patricia-Baleen gas field.

RBC Capital Markets values Santos' Otway assets sold today at $119 million, so the transaction is a tad below what the bank sees as the carrying value.

"From a Santos perspective the transaction is more evidence of new management seeking to rationalise its extensive portfolio of assets," RBC's Ben Wilson said this morning in a client note.

"With last year's sale of the Kipper project, Santos has now exited the geography entirely. Santos is selling a quantity of uncontracted gas through both Casino and Sole.

"While this may be concerning given how tight Santos' overall reserves to contracted gas ratio is, as with the Kipper sale, the complexities and expense of shifting gas from offshore Victoria to Queensland (where Santos needs the gas) are formidable."

The bank noted, however, that Cooper flagged rehabilitation liabilities of up to $140 million which would transfer to Cooper.

Cooper has completed the front end engineering and design for Sole at a capital cost of $552 million, signed binding gas sales agreements with Alinta Energy (up to 16 petajoules) and O-I Australia, and managing director David Maxwell said this morning that preparations for FID were "well underway".

These contracts, together with the sales agreement with AGL Energy, provide sales for up to 77PJ of Cooper's 121PJ equity share of Sole gas. Cooper has now contracted 9.6PJ of its 12.5PJ annual share of Sole production for the first eight years of the field's life.

Cooper said in its quarterly this morning that its remaining uncontracted gas was attracting "firm" interest from gas buyers. First gas is targeted for the first quarter of 2019.

The company said geological and geophysical work in VIC/RL13, VIC/RL14 and VIC/RL15, offshore Gippsland Basin, was ongoing, focusing on prospectivity additional to that identified in Manta and Chimaera East announced in May.

The $82 million amount for this morning's deal comprised of $62 million at completion with a further milestone payment of $20 million upon the earlier of a final investment decision on the Sole gas project or the receipt of cash proceeds from any sell-down by Cooper of any of its interests in the sale assets.

"This sale is in line with our stated objective to rationalise and shape our asset portfolio in order to become a low-cost, reliable and high performance business," Gallagher said.

The deal is expected to be completed early next year, subject to the usual consents and regulatory approvals.

Cooper financials

Cooper this morning announced revenue of $A4.9 million, down $6.6 million from Q2 due to lower volumes and a lower annual average oil price of $A54.93/bbl, though it is still in a strong financial position with cash and investments of $40.2 million.

"The resumption of drilling in the Cooper Basin was successful with Callawonga-12 and we are looking forward to our first exploration well in nearly 18 months with the spudding of Penneshaw-1 in November," Maxwell said.

"The concentration of our portfolio in Australia continues with the completion of our exit from the Nabeul permit in Tunisia and the contract for sale [of] our remaining Indonesian asset announced last week.

"We expect to have achieved our objective of a portfolio completely concentrated on Australia within 12 months."

As Victoria's government announced a permanent ban on the exploration and development of all onshore unconventional gas, the future of Cooper's PEPs 150, 168 and 171 onshore Victoria are uncertain to say the least, and the company and its joint venture partners are reviewing their options and future plans.

While Cooper has suspended activities in these permits, the company remains hopeful, given the dire gas needs of the state, that they will one day be green-lit as they're conventional gas, rather than the more controversial unconventional kind.