The AGL Energy Limited (ASX: AGL) share price is having an exceptional day on the ASX boards so far this Tuesday. At the time of writing, the AGL share price is up a very healthy 5.11% to $6.38 a share. This would be a welcome turnaround for investors, who have had to watch as AGL sunk to multi-decade lows over the past few weeks and months.
Indeed, it was only yesterday that AGL sunk to yet another low of $5.97 a share. To put that in context, the last time the AGL share price had a '5' in front of it, it was way back in 2002.
So there would be more than a few shareholders who would be very pleased with what today's market has thrown up.
The AGL share price, although embattled for a few years now, has been struggling especially hard in 2021 so far. Even after today's upward move, the company is still down a nasty 47.5% year to date. Over the past 12 months, AGL shares have lost close to 57% of their value.
A series of earnings downgrades, a disappointing FY21 earnings report, sluggish national electricity market, and a poorly-received demerger plan are probably all contributing factors here.
So why are AGL shares shooting the roof today then?
Why is the AGL share price up 5% this Tuesday?
Well, we did get some news out of the company yesterday that may be having some spillover effects today. As we reported at the time, AGL announced that it had signed a new sales arrangement for gas with the ASX energy company Cooper Energy Ltd. (ASX: COE).
Cooper is now contracted to sell "all developed and uncontracted volumes" of gas in its Otway Basin project to AGL at a price range of $6 to $8 per gigajoule. The contract will be in place until December 2030, and will result in the supply of 6 petajoules worth of gas supply per year.
Yesterday, this news seemed to do nothing for the AGL share price. But today, it's a new story.
It's possible that some investors have changed their minds on the news of this deal.
It's also possible that the lows we saw yesterday were finally enough for some value investors to step in and pick up some shares for multi-decade low pricing.
Whatever the reason, today is certainly a happier day for AGL investors than what they would have become used to in recent times.
At the current AGL share price of $6.35, the company has a market capitalisation of $3.78 billion, and a dividend yield of 10.22%.
