BEACH ENERGY LIMITED Quarterly Report
for the period ended 31 March 2016
HIGHLIGHTS FINANCIALSales volumes up 5% to 2.6 MMboe due to the Drillsearch merger and higher gas
volumes, partially offset by timing of crude oil shipments
Total sales revenue down 5% to $120 million, mainly due to lower realised oil and gas liquids prices
Capital expenditure down 51% to $38 million due to capital management initiatives
and high-grading of programs to counter the current environment of lower oil prices
Cash reserves of $242 million, convertible notes of $86 million, drawn debt of $150 million and undrawn debt facilities of $350 million; convertible notes redeemed subsequent to quarter end
OPERATIONSQuarterly production up 8% to 2.4 MMboe due to the Drillsearch merger and sustained oil production from ex PEL 91
Artificial lift campaign completed in ex PEL 91, resulting in incremental production
of 440 bopd
Operating initiatives expected to deliver further cost savings of up to $7 million per
annum (pre-tax)
In excess of 1.1 million hours of LTI-free operations achieved
Nine wells completed with a success rate of 78%
CORPORATEDrillsearch merger completed 1 March 2016; estimated annual cost savings of up
to $40 million (pre-tax) to be fully realised in FY17
Organisation review and Drillsearch merger expected to result in a 29% headcount reduction since 30 June 2015
Surrender of PEP 52181 in the Taranaki Basin, New Zealand
Chief Financial Officer, Kathryn Presser, to depart Beach on 1 July 2016
SUBSEQUENT EVENTSRevised agreement for sale of Egypt assets to Rockhopper
Exit from BMG joint venture in the Gippsland Basin, effective 27 October 2016
FY16 production guidance increased to 9.5 - 9.8 MMboe (previously 8.0 - 8.6 MMboe)
FY16 capital expenditure guidance maintained at $180 - $210 million
March Q3 FY15 | December Q2 FY16 | March Q3 FY16 | Qtr on Qtr Change | YTD | |
Production (kboe) | 2,106.5 | 2,253.5 | 2,439.5 | 8% | 6,971.8 |
Sales Volumes (kboe) | 2,212.5 | 2,518.7 | 2,649.8 | 5% | 7,757.8 |
Sales Revenue ($ million) | 130.7 | 126.4 | 119.7 | (5%) | 391.3 |
Oil Price ($/bbl) | 71.0 | 56.1 | 50.9 | (9%) | 58.2 |
Cash ($ million) | 164.6 | 164.0 | 241.61 | 47% | 241.61 |
25 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
Investor enquiriesDerek Piper
T +61 8 8338 2833
Media enquiriesSylvia Rapo
T +61 8 8338 2833
DIRECTORS
Independent Non-executive ChairmanGlenn Davis
Independent Non-executive DirectorsPhilip Bainbridge Colin Beckett Fiona Bennett John Butler
Jim McKerlie Doug Schwebel
Neil Gibbins
Acting Chief Executive Officer
28 April 2016 Ref: #034/16
1 Includes cash acquired as part of the merger with Drillsearch; pre redemption of remaining convertible notes - refer liquidity discussion
FINANCIAL SALESSales volumes of 2,650 kboe were 5% higher than the prior quarter and include additional volumes recognised following the merger with Drillsearch (effective 1 March 2016). Other factors which impacted sales volumes include:
Higher sales gas volumes;
Timing of crude oil shipments, with five liftings during the current quarter compared with six during the prior quarter;
Lower third party oil sales due to less liftings and recognition of Drillsearch volumes as own product sales; and
Timing of LPG and condensate liftings.
Sales | March Q3 FY15 | December Q2 FY16 | March Q3 FY16 | Qtr on Qtr Change | YTD | |
Oil (kbbl) | Cooper and Eromanga Basins - Own Product | 1,047.3 | 1,088.9 | 1,270.6 | 17% | 3,457.2 |
Cooper and Eromanga Basins - Third Party | 276.0 | 351.4 | 252.4 | (28%) | 977.1 | |
Total Cooper Oil | 1,323.3 | 1,440.3 | 1,523.0 | 6% | 4,434.3 | |
Egypt | 38.0 | 39.9 | 29.5 | (26%) | 116.7 | |
Total Oil | 1,361.3 | 1,480.2 | 1,552.5 | 5% | 4,551.0 | |
Sales Gas and Ethane (PJ) | Cooper Basin - Own Product | 3.6 | 4.8 | 5.5 | 13% | 15.5 |
Cooper Basin - Third Party | 0.7 | 0.1 | 0.1 | 15% | 0.3 | |
Egypt | - | 0.1 | 0.1 | (12%) | 0.2 | |
Total Gas and Ethane | 4.3 | 5.0 | 5.7 | 13% | 16.0 | |
LPG (kt) | Cooper Basin - Own Product | 9.0 | 10.4 | 6.9 | (34%) | 30.2 |
Cooper Basin - Third Party | 0.3 | 0.2 | 0.2 | (22%) | 0.8 | |
Total LPG | 9.3 | 10.6 | 7.1 | (33%) | 31.0 | |
Condensate (kbbl) | Cooper Basin - Own Product | 39.2 | 89.1 | 69.0 | (23%) | 204.5 |
Cooper Basin - Third Party | 2.0 | 1.9 | 1.4 | (27%) | 5.2 | |
Total Condensate | 41.2 | 91.0 | 70.4 | (23%) | 209.7 | |
Total Oil and Gas Sales (kboe) | 2,212.5 | 2,518.7 | 2,649.8 | 5% | 7,757.8 | |
Total - Own Product (kboe) | 1,811.3 | 2,145.0 | 2,373.2 | 11% | 6,710.3 | |
Total - Third Party (kboe) | 401.2 | 373.7 | 276.6 | (26%) | 1,047.5 | |
Total sales revenue decreased 5% to $120 million. The decline was mainly due to lower realised prices and reduced gas liquids sales volumes, partially offset by higher oil sales volumes. The average realised Australian dollar oil price decreased to $51/bbl (from $56/bbl), representing a 9% decline from the prior quarter. The average realised sales gas and ethane price decreased 2% to $5.95/GJ (from $6.08/bbl) due to a higher portion of Drillsearch volumes in the sales mix.
Sales Revenue ($ million) | March Q3 FY15 | December Q2 FY16 | March Q3 FY16 | Qtr on Qtr Change | YTD |
Oil | 96.7 | 83.0 | 79.1 | (5%) | 264.7 |
Sales Gas and Ethane | 24.9 | 30.5 | 33.5 | 10% | 96.0 |
LPG | 6.1 | 6.8 | 3.6 | (47%) | 17.8 |
Condensate | 3.0 | 6.1 | 3.5 | (41%) | 12.8 |
Sales Gas and Gas Liquids | 34.0 | 43.4 | 40.6 | (6%) | 126.6 |
Total Oil and Gas | 130.7 | 126.4 | 119.7 | (5%) | 391.3 |
Total - Own Product | 107.0 | 104.5 | 106.9 | 2% | 329.5 |
Total - Third Party | 23.7 | 21.9 | 12.8 | (41%) | 61.8 |
Average Realised Prices | March Q3 FY15 | December Q2 FY16 | March Q3 FY16 | Qtr on Qtr Change | YTD |
All Products ($/boe) | 59.1 | 50.1 | 45.2 | (10%) | 50.4 |
Oil ($/bbl) | 71.0 | 56.1 | 50.9 | (9%) | 58.2 |
Sales Gas and Ethane ($/GJ) | 5.8 | 6.1 | 6.0 | (2%) | 6.0 |
LPG ($/t) | 659.2 | 638.7 | 503.3 | (21%) | 573.4 |
Condensate ($/bbl) | 73.4 | 66.2 | 50.2 | (24%) | 61.2 |
Third quarter capital expenditure of $38 million was 51% lower than the prior quarter and 52% lower than the prior corresponding period. These reductions are attributable to capital management initiatives and high-grading of programs to counter the current environment of lower oil prices.
Capital expenditure guidance for FY16 has been reviewed to account for year-to-date expenditure, commitments associated with the enlarged acreage position, and ongoing efforts to minimise or defer expenditure where appropriate. Following this review, capital expenditure is expected to be maintained within the previous guidance range of $180 -
$210 million. This reflects capital expenditure of $160 million for the nine month period ended 31 March 2016, and estimated Q4 FY16 expenditure of $20 - $50 million. Additional expenditure relating to former Drillsearch permit interests for the period 1 March 2016 to 30 June 2016 is expected to be broadly offset by additional reductions and deferrals identified for H2 FY16. Further details are included in the announcement of 27 April 2016.
Capital Expenditure ($ million) | March Q3 FY15 | December Q2 FY16 | March Q3 FY16 | Qtr on Qtr Change | YTD |
Exploration and Appraisal | 22.6 | 20.1 | 7.7 | (62%) | 36.0 |
Development, Plant and Equipment | 56.9 | 57.4 | 30.3 | (47%) | 123.6 |
Total | 79.5 | 77.5 | 38.0 | (51%) | 159.6 |
Cash reserves were $242 million at quarter end, with drawn debt of $150 million and remaining convertible notes on issue of $86 million. These figures include cash and convertible notes acquired as part of the merger with Drillsearch.
On 11 April 2016, outstanding Drillsearch convertible notes were redeemed using cash reserves. Following redemption, Beach had cash reserves of approximately $150 million, drawn debt of $150 million and undrawn debt facilities of
$350 million. Further information relating to redemption of convertible notes is contained in the announcement of
24 March 2016.
CAPITAL STRUCTUREDuring the quarter, 557,826,555 fully paid ordinary shares were issued upon implementation of the merger with
Drillsearch.
Capital Structure | December Q2 FY16 | March Q3 FY16 | Qtr on Qtr Change |
Fully Paid Ordinary Shares | 1,302,877,977 | 1,860,704,532 | 42.8% |
Unlisted Employee Rights | 5,019,025 | 5,019,025 | - |
The following hedges were in place as at 31 March 2016 and include collars acquired as part of the merger with Drillsearch.
Hedges (Brent) | Floor $45 per bbl | Collar US$60-90 per bbl | Collar US$60-85 per bbl | Total Hedged Volumes (bbl) |
FY16 (remaining) | 555,000 | 154,500 | 75,000 | 784,500 |
FY17 | 1,327,500 | - | 215,001 | 1,542,501 |
Total | 1,882,500 | 154,500 | 290,001 | 2,327,001 |
Beach Energy Limited issued this content on 28 April 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 27 April 2016 23:47:27 UTC
Original Document: http://www.beachenergy.com.au/IRM/PDF/4783/Quarterlyreportfortheperiodended31March2016
