Australia's Beach Energy Limited (Beach) reported Thursday the following revisions to production and capital expenditure guidance for the 2015 financial year (FY15).
Beach has revised its FY15 production guidance range to 8.9-9.4 million barrels of oil equivalent, or MMboe (from 8.6-9.4 MMboe).
While Beach has retained production guidance within the range originally announced, there is an expectation that full year production will be weighted towards the upper end of the original range. Production for the second half is expected to be lower than the first half, predominantly due to a conservative approach taken in relation to expectations for non-operated production.
Beach has undertaken a detailed review of its capital expenditure program as a result of the current environment of lower oil prices. Within the constraints of existing contracts and committed expenditure, some projects have been identified for deferment. This will provide an initial reduction in estimated 2H FY15 capital expenditure of up to $43.45 million or AUD 55 million (around 20 percent). Final 2015 calendar year guidance is yet to be received from Santos in relation to the South Australian Cooper Basin (SACB) and South West Queensland (SWQ) JVs, with Santos continuing to flag significant cuts across its business. It should be noted that Beach has a large exposure to SACB and SWQ JVs capital expenditure. On receipt of the final estimates from Santos, Beach will provide further guidance in relation to its FY15 capital expenditure. Pending this, Beach has conservatively revised its FY15 guidance range down to $339.7-371.3 million (AUD 430-470 million), as summarized below.
* Certain reductions are still subject to joint venture approval
^ Approved expenditure in relation to T/49P and ATP 924 farm-in expenditure (predominantly seismic survey costs), SACB and SWQ JVs oil projects and ATP 855 fracture stimulation
The initial reduction in 2H FY15 capital expenditure primarily relates to SACB and SWQ JVs gas projects and deferment of certain drilling and infrastructure projects. Components of the revised FY15 capital expenditure guidance are summarized below.
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