Page 14 - AsianOil Week 16

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Beach’s Q3-FY20 production climbs, revenue slides
PROJECTS & COMPANIES
AUSTRALIAN independent Beach Energy increased its production in the third quarter of financial year 2019-2020 by 8% quarter on quar- ter to 6.9mn barrels of oil equivalent (76,700 boe per day).
The company said on April 22 that oil pro- duction from the Western Flank of the Cooper Basin had increased by 15% q/q to 2.6mn barrels (23,100 bpd) in the January-March period.
While the company’s revenue fell by 7% q/q to AUD431mn ($272.9mn) as a result of the collapse in oil prices, increased revenue from gas sales helped to mitigate the worst of the fall- out. Oil revenue slid 25% q/q to AUD185mn ($117.2mn), while revenue from the sale of gas, condensate and liquefied petroleum gas (LPG) climbed by 14% to AUD245mn ($155.2mn).
The international oil market has been rocked by the coronavirus (COVID-19) pandemic as well as a price war between Saudi Arabia and Russia. US oil prices fell into the negative for the first time ever earlier this week. Beach, however, said revenue from its gas sales covered its oper- ating and stay-in-business costs, meaning that it is “highly resilient” to oil price volatility.
Managing director and CEO Matt Kay said that despite the company’s “robust asset port- folio” and “extremely strong balance sheet”, the company was reviewing proposed activi- ties for financial year 2020-2021 and aimed to defer up to 30% of its previously planned capital expenditure.
Beach said its 2019-2020 production guid- ance remained unchanged at 27-28mn boe, while capex and earnings before interest, taxes, depreciation and amortisation (EBITDA) are both projected to come in at the lower end of their respective ranges of AUD875-950mn ($554.3-601.8mn) and AUD1.175-1.25bn ($744.3-791.8mn).
Two days prior to its results announcement, Beach revealed that it had terminated the Victo- rian Otway Basin Joint Venture’s contract with Diamond Offshore Drilling for the Ocean Onyx rig. Beach operates the venture with 60% stake, while OG Energy owns the outstanding interest.
Beach said it had exercised its right to terminate the rig contract after Ocean Onyx arrived in Victoria State waters later than agreed upon. The company is now in talks with Diamond Offshore and its other service pro- viders with regard to a new contract and does not expect drilling to begin until 2020-2021. The company added that the cancellation would not affect its 2019-2020 guidance.™
AGIG mulls midstream investment at gas project offshore Victoria
FINANCE & INVESTMENT
AUSTRALIAN Gas Infrastructure Group (AGIG) may join a AUD200mn ($126.8mn) development of midstream gas infrastructure necessary to com- mercialise the Golden Beach gas production and storage project off Victoria’s coast.
GB Energy Holdings operates the Golden Beach project, which aims to produce gas from the partially depleted field for an initial two-year window before converting the site into a storage facility.
AGIG said on April 22 that it had signed a non-binding but exclusive transaction process deed with GB Energy that sets out the process for negotiating and executing documentation for
AGIG’s proposal to fund, build and operate the project’s midstream infrastructure.
The development will cover all the plant, prop- erty, equipment and activities needed to transmit and process gas to and from the field. If the project proceeds as expected, then first gas should be deliv- ered to the Longford Gas Hub and its associated strategic pipeline infrastructure as early as 2022.
Both companies said the investment would “deliver greater gas energy security to the East Coast gas market, enhance supply volumes and deliver Victoria a critical gas storage facil- ity to underpin the state’s push toward renew- able energy.”
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w w w . N E W S B A S E . c o m Week 16 23•April•2020