Beach Energy's FY14 Capex Projected to Reach $440M

Beach Energy Limited provided the following guidance range in relation to the financial year 2014 (FY14) beginning July 1:

  • Production – 8.7 to 9.3 million barrels of oil equivalent
  • Capital expenditure – $385 to $440 million (AUD 420 to AUD 480 million)

The above guidance has resulted from the annual strategy and budget review process, which takes into consideration business objectives, operating performance, key strategies and more macro factors such as industry conditions.

Production

FY14 oil and gas production is expected to increase, primarily as a result of:

  • Continued exploration, appraisal and development success, with increased volumes expected to be transported through the new Western Flank oil flowline network to Moomba
  • Full year production from Beach operated gas and gas liquids from PEL 106B (Beach 50 percent and operator, Drillsearch Energy Ltd 50 percent)
  • Increased conventional gas production from the South Australian Cooper Basin Joint Venture, or SACB JV, (Beach/Delhi 20.21 percent, Santos Ltd 66.6 percent and operator, Origin Energy Ltd 13.19 percent) as a result of infill development drilling and
  • Increased oil production from Abu Sennan (Beach 22 percent, Kuwait Energy Egypt Ltd 50 percent and operator, Dover Investments Ltd 28 percent, Egypt

Capital Expenditure

The guidance range for FY14 capital expenditure allows for discretionary expenditure as deemed appropriate and the potential impact of weather and other delays. The range does not account for potential acquisitions, divestments or farm downs. The breakdown of the $385-$440 million (AUD 420-AUD 480 million) between development and exploration is expected to be as follows:

  • Development expenditure of $225-$257 million (AUD 245-AUD 280 million)
    • Cooper Basin, non-SACB JV – $55-$60 million (AUD 60-AUD 65 million)
    • Cooper Basin SACB JV and SWQ JVs – $160-$183 million (AUD 175-AUD 200 million)
    • International – $9-$14 million (AUD 10-AUD 15 million)
  • Exploration expenditure of $160-$183 million (AUD 175-AUD 200 million)
    • Cooper Basin, non-SACB JV – $41-$46 (AUD 45-AUD 50 million)
    • Cooper Basin SACB JV and SWQ JVs – $4.6 million (AUD 5 million)
    • International – $28-$32 million (AUD 30-AUD 35 million)
    • Unconventional – $83-$92 million (AUD 90-AUD 100 million)
    • Other – $4.6-$9 million (AUD 5-AUD 10 million)

As a result of an expected improvement in operating cash flow, and in conjunction with a cash balance June 30 of $319 million (AUD 348 million) and a secured $138 million (AUD 150 million) multi-option facility, Beach anticipates it will be able to fund its FY14 capital expenditure activities in full.

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