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Beach bucks oil turmoil to end quarter on strong note

Business

Adelaide-based oil and gas producer Beach Energy has claimed a strengthened end to the second quarter of its financial year, despite torrid oil prices plaguing the industry.

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Beach announced today sales volumes of 2.5 MMboe were down 3 per cent on the last quarter, largely attributed to seasonally lower gas demand and third party sales.

Total sales revenue was $126 million, down 13 per cent on the last quarter, as a result of the sustained lower oil prices.

Capital expenditure during the quarter was $78 million.

Beach stated it continued to monitor its capital expenditure program and last week announced a reduction of its second half of FY16 program of up to $40 million.

Guidance has also been revised to $180 – $210 million, previously $240 – $270 million.

“Beach closed the quarter with cash reserves of $164 million, which has been held relatively constant over the last six months,” acting chief executive Neil Gibbins Gibbins said.

“At all times, not just in a lower oil price environment, it is important that we continue to ensure that the company remains in a strong financial position.

“To that end we have strengthened our balance sheet further with a new $530 million debt facility, up $210 million from our previous facility.

Gibbins said operationally Beach continued to deliver strong quarterly production of 2.3 MMboe with a better than expected performance from the Bauer Field, contribution from new facilities at Stunsail and Pennington and strong performance from operated and non-operated gas fields.

Last week Beach announced a revision of its FY16 production guidance to 8.0 – 8.6 MMboe (from 7.8 – 8.6 MMboe).

The narrowed range reflects outperformance in the first half of FY16, with production of approximately 4.5 MMboe (net to Beach).

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