BEACH ENERGY LIMITED Quarterly Report
for the period ended 31 December 2016
KEY HIGHLIGHTSCash reserves increased by $55 million, benefiting from cost saving initiatives and leverage to higher realised
oil prices; available liquidity increased to approximately $650 million.
Record half year sales volumes of 6.4 MMboe, up 11% from the prior period and 25% from H1 FY16.
Record half year production of 5.5 MMboe, up 8% from the prior period and 22% from H1 FY16.
Quarterly sales revenue of $176 million, up 4% primarily due to higher realised oil prices.
Quarterly sales and production volumes down 7% and 9% respectively, with successful development activities partially mitigating the impact of natural field decline.
Western Flank operated field costs below $3.00/boe, down more than 20% year-to-date.
SACB JV delivering operating cost savings and on track to beat our full year cost reduction guidance of 15%.
Capital expenditure up 38% to $42 million due to increased Western Flank exploration, appraisal and development activity.
Oil discoveries at Osmanli-1 and September-1 in ex PEL 91, representing Birkhead and Poolowanna oil exploration success.
15 wells drilled with an 80% success rate; 24 wells drilled during H1 FY17 with an 88% success rate.
Reduced FY17 capital expenditure guidance of $170 - 185 million (previously $180 - 200 million); expanded drilling program to be delivered at a lower overall cost.
Increased FY17 production guidance of 10.3 - 10.7 MMboe (previously 9.7 - 10.3 MMboe).
"Net quarterly operating cash flow of $87 million and an increase in cash reserves of $55 million clearly demonstrate Beach's low cost operating model and leverage to higher oil prices. Our strict focus on costs continues to deliver results, including a year-to-date reduction in Western Flank operated field costs of more than 20%. Our financial position has strengthened and we now have available liquidity of approximately $650 million.
"In the field we are delivering our capital program on time and under budget. Our 80% drilling success rate includes the Osmanli-1 Birkhead oil discovery, which provided encouragement for the Birkhead play within our Western Flank acreage. In addition, production facilities for the Kangaroo-1 Birkhead oil discovery have been installed and the well is now on extended production test. For the first half of FY17, Beach has achieved record production of 5.5 MMboe, with successful field development activities helping to mitigate the impact of natural production decline.
"Our revised FY17 capital expenditure and production guidance announced today reinforces progress made this year. Due to record half-year production, success in the field and cost efficiencies, we have materially increased our drilling activity for FY17. We now plan to drill 16 operated wells (+3) and up to 42 non-operated wells (+5). Thanks to cost savings and efficiency gains, we expect to deliver the expanded program at a lower overall cost of $170 - 185 million (previously $180 - 200 million).
"Results in the field have also allowed us to increase production estimates, with guidance now in the range of 10.3 -
10.7 MMboe (previously 9.7 - 10.3 MMboe). These guidance revisions reflect positive outcomes achieved in the first half, including exploration success and increased investment in our core Western Flank acreage."
Beach Energy Limited ABN: 20 007 617 969 ASX: BPT25 Conyngham Street, Glenside SA 5065
GPO Box 175, Adelaide SA 5001
www.beachenergy.com.au info@beachenergy.com.au
Investor enquiries: Derek Piper +61 8 8338 2833 Media enquiries: Sylvia Rapo +61 8 8338 2833Quarterly Report for the period ended 31 December 2016 Page 1
31 January 2017 Ref: #003/17
Page 1
Key Statistics | December Q2 FY16 | September Q1 FY17 | December Q2 FY17 | Qtr on Qtr Change | YTD |
Production (kboe) | 2,253 | 2,902 | 2,628 | (9%) | 5,530 |
Sales Volumes (kboe) | 2,519 | 3,290 | 3,073 | (7%) | 6,363 |
Sales Revenue ($ million) | 126 | 169 | 176 | 4% | 344 |
Oil Price ($/bbl) | 56.1 | 62.6 | 73.2 | 17% | 67.5 |
Cash ($ million) | 164 | 243 | 298 | 22% | 298 |
Drawn debt ($ million) | 150 | 150 | 150 | - | 150 |
Record half year sales volumes of 6.4 MMboe were achieved, representing an increase of 11% from the prior period and 25% from H1 FY16. Quarterly sales volumes of 3,073 kboe were 7% lower than the prior quarter, due mainly to lower production volumes and one less oil shipment.
Sales Volumes | December Q2 FY16 | September Q1 FY17 | December Q2 FY17 | Qtr on Qtr Change | YTD | |
Oil (kbbl) | Cooper and Eromanga Basins - Own Product | 1,089 | 1,637 | 1,405 | (14%) | 3,042 |
Cooper and Eromanga Basins - Third Party | 351 | 147 | 143 | (3%) | 290 | |
Total Cooper Basin Oil | 1,440 | 1,784 | 1,548 | (13%) | 3,332 | |
Egypt | 40 | - | - | - | - | |
Total Oil | 1,480 | 1,784 | 1,548 | (13%) | 3,332 | |
Sales Gas (PJ) | Cooper Basin - Own Product | 4.8 | 7.3 | 7.0 | (4%) | 14.3 |
Cooper Basin - Third Party | 0.1 | 0.1 | 0.2 | 94% | 0.3 | |
Egypt | 0.1 | - | - | - | - | |
Total Gas | 5.0 | 7.4 | 7.2 | (3%) | 14.6 | |
LPG (kt) | Cooper Basin - Own Product | 10.4 | 10.7 | 13.8 | 29% | 24.5 |
Cooper Basin - Third Party | 0.2 | 0.4 | - | (100%) | 0.4 | |
Total LPG | 10.6 | 11.1 | 13.8 | 24% | 24.9 | |
Condensate (kbbl) | Cooper Basin - Own Product | 89 | 142 | 176 | 24% | 318 |
Cooper Basin - Third Party | 2 | 4 | 2 | (45%) | 6 | |
Total Condensate | 91 | 146 | 178 | 22% | 324 | |
Total Oil and Gas Sales (kboe) | 2,519 | 3,290 | 3,073 | (7%) | 6,363 | |
Total - Own Product (kboe) | 2,145 | 3,116 | 2,890 | (7%) | 6,006 | |
Total - Third Party (kboe) | 374 | 174 | 183 | 5% | 357 | |
Total sales revenue of $176 million was 4% higher than the prior quarter, mainly due to higher realised oil and liquids prices. The average realised Australian dollar oil price increased by 17% to $73/bbl (from $63/bbl), and the average realised sales gas price remained unchanged at $5.92/GJ.
Sales Revenue ($ million) | December Q2 FY16 | September Q1 FY17 | December Q2 FY17 | Qtr on Qtr Change | YTD |
Oil | 83.0 | 111.6 | 113.3 | 2% | 224.9 |
Sales Gas | 30.5 | 43.9 | 42.8 | (2%) | 86.7 |
LPG | 6.8 | 5.0 | 7.4 | 48% | 12.4 |
Condensate | 6.1 | 8.4 | 12.0 | 42% | 20.4 |
Sales Gas and Gas Liquids | 43.4 | 57.3 | 62.2 | 9% | 119.5 |
Total Oil and Gas | 126.4 | 168.9 | 175.5 | 4% | 344.4 |
Total - Own Product | 104.5 | 158.9 | 164.7 | 4% | 323.6 |
Total - Third Party | 21.9 | 10.0 | 10.8 | 8% | 20.8 |
Average Realised Prices | December Q2 FY16 | September Q1 FY17 | December Q2 FY17 | Qtr on Qtr Change | YTD |
All Products ($/boe) | 50.1 | 51.3 | 57.1 | 11% | 54.1 |
Oil ($/bbl) | 56.1 | 62.6 | 73.2 | 17% | 67.5 |
Sales Gas ($/GJ) | 6.1 | 5.9 | 5.9 | 0% | 5.9 |
LPG ($/t) | 638.7 | 446.9 | 534.5 | 20% | 495.4 |
Condensate ($/bbl) | 66.2 | 57.6 | 67.4 | 17% | 63.0 |
Capital expenditure of $42 million was 38% higher than the prior quarter, due mainly to increased exploration and appraisal activity within Beach's Western Flank acreage, and increased activity associated with the Bauer facility expansion and Middleton compression project. Capital expenditure totalled $72 million in H1 FY17, representing a 41% reduction from H1 FY16.
Capital Expenditure ($ million) | December Q2 FY16 | September Q1 FY17 | December Q2 FY17 | Qtr on Qtr Change | YTD |
Exploration and Appraisal | 20.1 | 6.5 | 16.2 | 151% | 22.7 |
Development, Plant and Equipment | 57.4 | 23.9 | 25.7 | 8% | 49.6 |
Total | 77.5 | 30.4 | 41.9 | 38% | 72.3 |
Subsequent to quarter-end, Beach announced reduced FY17 capital expenditure guidance of $170 - 185 million (previously $180 - 200 million). Due to record half year production, success in the field and cost efficiencies, Beach has materially increased its drilling activity for FY17. Furthermore, Beach is confident that the expanded program can be undertaken at a cost below original guidance. Additional discretionary projects to be undertaken in H2 FY17 include:
Installation of production facilities in ex PEL 91 to bring the Kangaroo-1 oil well online and provide capacity for
future discoveries.
Two follow-up exploration wells in ex PEL 91 to further appraise the Birkhead Formation oil play near the Kangaroo
discovery.
Nine operated exploration wells planned for FY17.
Two development wells in the Pennington Field in ex PEL 91 to optimise field commerciality and accelerate production.
Seven operated appraisal / development wells planned for FY17.
Additional SACB and SWQ joint venture wells proposed by the operator due to improved drilling efficiencies which have resulted in faster drilling times.
Up to 36 wells proposed for FY17. Certain wells are subject to Beach review and confirmation of participation.
Further details are contained in the announcement of 31 January 2017.
LIQUIDITYCash reserves increased by $55 million during the quarter, which included net operating cash flow of $87 million, capital expenditure of $42 million and net receipts from asset sales. At quarter-end, cash reserves were $298 million, with drawn debt of $150 million and undrawn debt facilities of $350 million.
Beach's strengthening liquidity position demonstrates the company's leverage to improving oil prices, and ongoing efforts to reduce costs and improve operating efficiencies. Field operating cost savings of more than 20% were achieved in H1 FY17 in Beach's operated Western Flank acreage, and the SACB and SWQ JVs are on track to beat our full year operating cost reduction guidance of 15%. Further detail on cost savings will accompany the FY17 Half Year Report, which is due for release on 20 February 2017.
Liquidity ($ million) | December Q2 FY16 | September Q1 FY17 | December Q2 FY17 | Qtr on Qtr Change |
Cash Reserves | 164.0 | 243.5 | 298.2 | 22% |
Drawn debt | 150.0 | 150.0 | 150.0 | - |
Net Cash | 14.0 | 93.5 | 148.2 | 59% |
Undrawn Facilities | 350.0 | 350.0 | 350.0 | - |
Capital Structure | September Q1 FY17 | December Q2 FY17 | Qtr on Qtr Change |
Fully Paid Ordinary Shares | 1,865,094,804 | 1,865,094,804 | - |
Unlisted Employee Rights | 4,774,239 | 6,907,656 | 45% |
Beach Energy Limited published this content on 31 January 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 30 January 2017 22:29:11 UTC.
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