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Beach’s upstream push continues

The company has announced a new gas discovery in Victoria as
well as an upstream portfolio shake-up

COMMENTARY AUSTRALIAN independent Beach Energy has exploration well, followed by development wells
announced a new natural gas discovery in the in the Geographe and Thylacine fields.”
south-eastern state of Victoria as well as a port- The company has several irons in the fire
WHAT: folio shake-up that will free up cash flow as well beyond the Otway Basin, however, with some
Beach has made a new as provide new exploration opportunities. of these being delivered thanks to its recent deal
gas discovery is Victoria The company’s announcements come just to buy Senex Energy’s South Australian Cooper
and has expanded weeks after it revealed that its third-quarter Basin assets.
its acreage in South revenue had declined by 17.5% year on year to
Australia. AUD361mn ($262.8mn) owing to weaker inter- SA expansion
national oil prices. Despite revealing the weaker Beach said at the start of the month it had agreed
WHY: results at the end of October, Beach said at the to pay AUD87.5mn ($63.7mn) in cash for Senex
The East Coast gas time that it had good reason to be optimistic. Energy’s assets in the Cooper Basin.
market is expected to It not only pointed to the fact that revenue The acquisition includes Senex’s 60% oper-
experience a supply was up 13% from the previous quarter, a sign of ated interest in ex-PEL 104 and ex-PEL 111
shortfall within a few improving energy prices if not production, but – which include the Growler, Snatcher and Spit-
years. that it had a new wave of exploration prospects fire oilfields and associated infrastructure – and
on the horizon. This wave included the Enter- raises Beach’s share in both licences to 100%.
WHAT NEXT: prise 1 onshore-to-offshore well – the source of Beach will also receive a 60% operated inter-
The company’s assets in this week’s new find. est the Growler-Lycium flowline system (GLFS)
WA could turn it into a and a 40% interest in the Lycium-Moomba
key supplier to regional Victorian discovery flowline system (LMFS), giving the company
gas markets. Beach said on November 10 that Enterprise 1, 100% ownership of infrastructure in the West-
located in the VIC/P42(V) permit, had inter- ern Flank.
sected a 146-metre gas column in the Upper Beach is also set to receive a 100% operated
Waarre Formation, including 115 metres of net stake in PPL 270, which contains the producing
gas pay with no gas-water contact identified. Gemba gas field, and a 70% operated interest in
The well, which was spudded about 3.5 PPL 207, which includes the producing Worrior
km from Port Campbell and 8 km from the oilfield.
Otway gas plant, was drilled diagonally off- Beach said these assets, which cover 10,876
shore to a total measured depth (MD) of 4,974 square km gross, had a production forecast of
metres, using an extended reach drilling (ERD) around 600,000 barrels of oil equivalent (boe)
approach that allowed for a 3.2-km step-out. for financial year 2020-2021, Moreover, they
While the formation is still being evaluated are expected to boost proven and probable (2P)
in order to determine a resource estimate, Beach reserves by 4.6mn barrels of oil and 2.2mn boe
said its preliminary assessment indicated that in gas and liquids.
key reservoir parameters were in line with pre- Kay said the transaction was estimated to
drill expectations. The company expects to have deliver around AUD5mn ($3.6mn) of annual
a resource estimate before it releases its July-De- operational savings, with these anticipated to
cember results in February 2021. be realised in the first year following the deal’s
Beach now intends to case and suspend the completion.
well as a future producer, with a well test antici- He said: “[T]he new acreage contains more
pated to confirm productivity and provide data than 10 drill-ready oil and gas prospects, provid-
for a proposed pipeline to the Otway gas plant. ing additional upside potential. These prospects
The company said it had already launched a will be integrated into our growth portfo-
detailed engineering work and regulatory lio as drilling candidates from financial year
approvals process for the pipeline. 2021-2022.”
“The Enterprise result also de-risks other Beach said the expanded exploration portfo-
nearby prospects, warranting their evaluation lio provided opportunities for it to focus on areas
as potential future drilling candidates,” Beach including the prospective Birkhead oil play, the
managing director and CEO Matt Kay said. southern portion of the Western Flank – covered
“Our focus now moves to the upcoming off- by the recently acquired Westeros 3D seismic –
shore Victorian Otway Basin drilling campaign, and multiple Patchawarra gas prospects adjacent
which is due to commence in the March 2021 to the Gemba discovery. The deal is expected to
quarter. The first well drilled will be the Artisan 1 be settled before the end of March 2021.

Week 45 12•November•2020 www. NEWSBASE .com P9