BEACH ENERGY LIMITED Quarterly Report
for the period ended 30 September 2015
FINANCIAL
Sales volumes of 2.6 MMboe, up 1% on prior quarter, mainly due to higher sales gas demand during peak winter months and initiation of the Origin Retail gas sales agreement
Total sales revenue of $145 million, down 15% on prior quarter, mainly due to lower
realised oil prices, partly offset by higher realised sales gas pricing
Capital expenditure of $44 million, down 36% on prior quarter, consistent with the curtailed FY16 program
Final FY15 dividend of 0.5 cents per share paid on 25 September 2015; total FY15 dividends paid of 1.5 cents per share
Cash reserves of $174 million, up $4 million from prior quarter; undrawn debt facility of $150 million and drawn debt of $150 million
OPERATIONS
Quarterly production of 2.3 MMboe, in line with prior quarter, mainly due to increased well head capacity and infrastructure capabilities, offset by natural field decline
30 June 2015 reserves and resources announced, with 2P reserves of 74.4 MMboe
and a 100% oil reserves replacement ratio in FY15
14 wells completed with a success rate of 93%
CORPORATE
Announcement of company strategy
Sale of Abu Sennan Concession in Egypt, consistent with strategy to focus close to home
Pre-emptive rights to acquire ATP 1056 interest exercised by joint venture parties
Resignation of Managing Director and appointment of Acting Chief Executive Officer
SUBSEQUENT EVENTS
Commencement of FY16 operated drilling program
Announcement of recommended proposal to merge Beach and Drillsearch
Issue of Annual Report, Corporate Governance Statement and AGM notice of meeting
September Q1 FY15 | June Q4 FY15 | September Q1 FY16 | Qtr on Qtr Change | |
Production (kboe) | 2,398.6 | 2,266.5 | 2,263.3 | (0%) |
Sales Volumes (kboe) | 2,875.2 | 2,562.2 | 2,589.3 | 1% |
Sales Revenue ($ million) | 232.9 | 170.2 | 145.2 | (15%) |
Oil Price ($/bbl) | 114.1 | 83.5 | 67.6 | (19%) |
Cash ($ million) | 342.7 | 170.3 | 174.1 | 2% |
KEY STATISTICS
Beach Energy Limited ABN: 20 007 617 969 ASX: BPT25 Conyngham Street
Glenside SA 5065
GPO Box 175
Adelaide SA 5001
T +61 8 8338 2833
W www.beachenergy.com.au E info@beachenergy.com.au
Derek Piper
T +61 8 8338 2833
Sylvia Rapo
T +61 8 8338 2833
DIRECTORS
Independent Non-executive ChairmanGlenn Davis
Independent Non-executive DirectorsColin Beckett Fiona Bennett John Butler Robert Cole Belinda Robinson Doug Schwebel
Neil Gibbins
Acting Chief Executive Officer
27 October 2015 Ref: #070/15
SALES
Sales volumes increased 1% to 2,589 kboe, mainly due to higher sales gas demand during peak winter months and initiation of the oil-linked GSA with Origin Retail. Movements in third party gas volumes resulted from changed sales allocation methods following the SACB and SWQ JVs' transition to separate lifting and marketing. Lower condensate sales were due to timing of shipments (one shipment compared with two in prior quarter).
Sales | September Q1 FY15 | June Q4 FY15 | September Q1 FY16 | Qtr on Qtr Change | |
Oil (kbbl) | Cooper and Eromanga Basins - Own Production | 1,207.9 | 1,127.5 | 1,097.7 | (3%) |
Cooper and Eromanga Basins - Third Party | 358.2 | 337.1 | 373.3 | 11% | |
Total Cooper Oil | 1,566.1 | 1,464.6 | 1,471.0 | 0% | |
Egypt | 21.4 | 48.6 | 47.3 | (3%) | |
Total Oil | 1,587.5 | 1,513.2 | 1,518.3 | 0% | |
Gas and Ethane (PJ) | Cooper Basin - Own Product | 5.9 | 4.0 | 5.1 | 26% |
Cooper Basin - Third Party | 0.7 | 0.9 | 0.1 | (87%) | |
Egypt | - | 0.1 | 0.1 | 10% | |
Total Gas and Ethane | 6.6 | 5.0 | 5.3 | 5% | |
LPG (kt) | Cooper Basin - Own Product | 8.4 | 12.1 | 13.0 | 7% |
Cooper Basin - Third Party | 0.3 | 0.2 | 0.3 | 34% | |
Total LPG | 8.7 | 12.3 | 13.3 | 7% | |
Condensate (kbbl) | Cooper Basin - Own Product | 74.0 | 80.7 | 46.4 | (43%) |
Cooper Basin - Third Party | 2.9 | 1.6 | 1.9 | 20% | |
Total Condensate | 76.9 | 82.3 | 48.3 | (41%) | |
Total Oil and Gas Sales (kboe) | 2,875.2 | 2,562.2 | 2,589.3 | 1% | |
Total - Own Product (kboe) | 2,390.9 | 2,066.4 | 2,192.1 | 6% | |
Total - Third Party (kboe) | 484.3 | 495.8 | 397.2 | (20%) | |
REVENUE
Total sales revenue decreased 15% to $145 million, mainly due to a reduction in oil prices. The average realised Australian dollar oil price decreased to $68/bbl (from $83/bbl), representing a 19% decline from the prior quarter.
Lower oil prices were partially offset by higher realised sales gas prices following initiation of the long-term oil-linked GSA with Origin Retail (announced 10 April 2013). Key benefits of the agreement include attractive oil-linked pricing with other parameters, and expected delivery of significant sales gas volumes over an initial eight year period (total volumes of up to 139 PJ), with a two year extension available to Origin Retail (for total volumes of up to 173 PJ over the full ten year period). It is expected that sales gas delivery under the long term GSA will increase over the course of FY16 to align with market requirements, whilst legacy contracts continue to be serviced.
Sales Revenue ($ million) | September Q1 FY15 | June Q4 FY15 | September Q1 FY16 | Qtr on Qtr Change |
Oil | 181.2 | 126.3 | 102.7 | (19%) |
Sales Gas and Ethane | 35.2 | 29.6 | 31.9 | 8% |
LPG | 8.1 | 7.4 | 7.4 | (0%) |
Condensate | 8.4 | 6.9 | 3.2 | (53%) |
Sales Gas and Gas Liquids | 51.7 | 43.9 | 42.5 | (3%) |
Total Oil and Gas | 232.9 | 170.2 | 145.2 | (15%) |
Total - Own Product | 187.2 | 137.7 | 118.1 | (14%) |
Total - Third Party | 45.7 | 32.5 | 27.1 | (17%) |
Average Realised Prices | September Q1 FY15 | June Q4 FY15 | September Q1 FY16 | Qtr on Qtr Change |
All Products ($/boe) | 81.0 | 66.4 | 56.1 | (16%) |
Oil ($/bbl) | 114.1 | 83.5 | 67.6 | (19%) |
Sales Gas and Ethane ($/GJ) | 5.3 | 5.9 | 6.0 | 3% |
LPG ($/t) | 926.0 | 602.2 | 558.5 | (7%) |
Condensate ($/bbl) | 109.1 | 83.7 | 67.7 | (19%) |
CAPITAL EXPENDITURE
As announced on 29 July 2015, capital expenditure guidance for FY16 is $240 - $270 million. The FY16 capital expenditure program has been prepared under the assumption of a continuing lower oil price environment, and represents a major reduction relative to FY15. Despite the reduction, the FY16 program has been framed to high-grade projects, incorporate a significant component of exploration and appraisal drilling, and continue the advancement of infrastructure capabilities.
First quarter capital expenditure of $44 million represented a 36% decrease from the prior quarter and a 63% reduction from the prior corresponding period. Expenditure predominantly related to non-operated development activities within the SACB and SWQ JVs.
Capital Expenditure ($ million) | September Q1 FY15 | June Q4 FY15 | September Q1 FY16 | Qtr on Qtr Change |
Exploration and Appraisal | 36.5 | 16.2 | 8.2 | (49%) |
Development, Plant and Equipment | 82.1 | 52.6 | 35.9 | (32%) |
Total | 118.6 | 68.8 | 44.1 | (36%) |
LIQUIDITY
Cash reserves were $174 million at quarter end, representing a $4 million increase from the prior period. The impact of lower realised oil prices, and payment of the final dividend totalling $5 million, were offset by lower capital expenditure and a disciplined and ongoing focus on reducing costs.
CAPITAL STRUCTURE
Capital Structure | June Q4 FY15 | September Q1 FY16 | Qtr on Qtr Change |
Fully Paid Ordinary Shares | 1,300,149,513 | 1,302,877,977 | 0% |
Unlisted Employee Rights | 5,777,763 | 3,493,755 | (40%) |
HEDGING
Beach's policy is to hedge up to 80% of oil production and corporate costs by securing floors to protect against downside oil price scenarios, while retaining upside potential. This approach is ongoing, with the following hedges in place as at 30 September 2015.
Period | Floor $45 per bbl (Brent) | Floor $65 per bbl (Brent) | Floor $70 per bbl (Brent) | Total Hedged Volumes (bbl) |
FY16 (remaining) | 1,275,000 | 225,000 | 112,500 | 1,612,500 |
FY17 | 787,500 | 787,500 | ||
Total | 2,062,500 | 225,000 | 112,500 | 2,400,000 |
PRODUCTION
Production of 2,263 kboe was in line with the prior quarter and broadly flat across all production categories, as
summarised below.
Production | September Q1 FY15 | June Q4 FY15 | September Q1 FY16 | Qtr on Qtr Change | |
Oil (kbbl) | Cooper Basin | 1,195.7 | 1,092.3 | 1,091.8 | (0%) |
Egypt | 18.9 | 50.5 | 48.4 | (4%) | |
Total Oil | 1,214.6 | 1,142.8 | 1,140.2 | (0%) | |
Sales Gas and Ethane (PJ) | Cooper Basin | 5.7 | 5.5 | 5.5 | (1%) |
Egypt | - | 0.1 | 0.1 | 16% | |
LPG (kt) | Cooper Basin | 12.1 | 10.5 | 10.8 | 3% |
Condensate (kbbl) | Cooper Basin | 103.3 | 82.1 | 83.7 | 2% |
Total Oil and Gas (kboe) | 2,398.3 | 2,266.5 | 2,263.3 | (0%) | |
NB. Preliminary data for SACB and SWQ JVs, ex PEL 104 / 111 and Egypt
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