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Emerging east coast gas supplier Cooper Energy has signalled an up to five-fold production increase in 2019-20 after its $355 million Sole project comes online off the coast of Victoria and it taps into the tight market that has seen industrial customers scrambling for supply.

Managing director David Maxwell said output by the junior should rise to about 6 million barrels of oil equivalent in the 2020 financial year, representing an increase of "between four and five" times current levels.

The forecast came as Cooper reported that construction of the Sole project is approaching 60 per cent complete and is on track to start commercial deliveries to customers including AGL Energy and EnergyAustralia in July 2019.

Cooper is also expecting increased gas prices from a tender process it is running for the purchase of gas from its Casino Henry venture off the coast of western Victoria for 2019, a region where it is also looking to increase production through additional drilling.

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The tender process has pointed to sales prices within the range quoted in the national competition regulator's April report, of $8-$11 a gigajoule, with a weighting towards the $9-$11/GJ end, Mr Maxwell told investors on a conference call on Monday.

"Gas supply from south-east Australia is tight and there's a lot of interest in any volumes available to contract," Mr Maxwell said, adding that results of the tender process would be finalised "very soon".

Cooper Energy shares, which have jumped 29 per cent this year as investors latch on to the company's east coast gas strategy, added as much as 2¢ in early trading to reach 43¢, their highest for almost four years. The company now has a market value of about $665 million.

Sole is one of the few new source of gas being developed for southern markets, where customers face the prospect of paying even higher prices to have coal seam gas piped from Queensland.

'A great advance'

At Casino Henry, Cooper now owns 50 per cent of the Minerva gas plant, one of three processing plants onshore Victoria treating gas from the offshore Otway Basin, after a deal struck with BHP in May. Production at the field rose 24 per cent in the June quarter to 33 terajoules a day after a well upgrade.

"Our gas tendering during the quarter has confirmed the south-east Australian gas market is continuing to evolve consistent with our strategy," Mr Maxwell said in Cooper's quarterly report on Monday.

He said the deal with BHP was "a great advance" to the company's plans to develop a "supply hub" in the Otway Basin.

At Sole, about 65 kilometres off the Victoria coast, Cooper is drilling a second production well after reporting success with its Sole-3 well, and preparing to install a pipeline to take gas ashore. Gas pipeline owner APA Group is spending $250 million to upgrade an onshore gas plant at Orbost which will process the molecules from the field.


Cooper reported  a 71 per cent surge in full-year sales for 2017-18 to $66.7 million on production that rose 54 per cent to 1.49 million boe.

It gave "conservative" guidance for production for 2018-19 of 1.4 million barrels of oil equivalent, but that excludes gas that could be produced from Sole during the start-up process.

Cooper is planning for a further phase of growth after the Sole project, involving further development at the Henry field, appraisal of the Manta field and exploration in the Otway region to find more gas to produce through the Minerva plant.