The Cooper Energy Ltd (ASX: COE) share price has been a strong performer on the local market on Wednesday.
At the time of writing the energy producer's shares are up 5% to 53 cents.
Why is the Cooper Energy share price charging higher?
Investors have been buying the energy company's shares after it announced a new gas sales agreement with energy giant AGL Energy Limited (ASX: AGL) this morning.
According to the release, Cooper Energy has signed new gas supply agreements with AGL Energy for its Sole (Gippsland Basin) and Casino Henry (Otway Basin) gas operations.
The release explains that the Sole gas field is poised to become south-east Australia's newest source of gas supply when it commences production on completion of the Orbost Gas Plant upgrade currently being undertaken by APA Group (ASX: APA).
The company has completed the construction of the offshore development of the gas field and APA is expected to conclude the plant upgrade works and commence commissioning and delivery of sales gas within the September 2019 quarter.
Management expects the Sole Gas Project to deliver an additional 68 terajoules (TJ) per day of natural gas supply for south-east Australia.
Cooper Energy's managing director, David Maxwell, was pleased to be expanding its contract with AGL Energy.
He said: "AGL Energy's commitment was critical to the Sole Gas Project proceeding and now, on the cusp of production start-up, we are delighted to add new supply agreements. Having been there as a customer which supported project finance it is fitting we now have agreements with AGL Energy for the supply of gas right from commissioning."
He added: "The extension of our supply relationship with AGL Energy to now also include Casino Henry reflects our multi-basin strategy under which we can offer a portfolio of sources. The Otway Basin offers a competitive source of gas supply for South Australia in particular and we hope our forthcoming drilling program will add to the resources we can bring to market."
This latest gain means the Cooper Energy share price is now up 43% since this time last year.
