Australia's Beach Energy Ltd. provided Wednesday the following guidance in relation to Financial Year 2016 (FY16) production volumes and capital expenditure. Guidance excludes potential impacts from weather related events, other unforeseen operational delays, exploration successes and corporate activity (acquisitions / divestments or farm‐ins / farm‐outs). Production guidance is net of fuel.
The recent industry‐wide focus on preserving cash reserves and liquidity has seen reduced drilling activity across the Cooper Basin and lower expectations for near‐term production profiles. Accordingly, the FY16 production guidance range of 7.8 to 8.6 million barrels of oil equivalent (MMboe) reflects the impact of natural field decline and curtailed drilling activity. Consideration has also been given to timing of new wells and facilities coming online.
Despite lower production, gas sales volumes in FY16 are expected to be higher than FY15 levels as a result of likely drawdown from storage.
The FY16 capital expenditure program has been prepared under the assumption of a continuing lower oil price environment, with a focus on preserving cash reserves and maintaining liquidity. Accordingly, a major reduction in capital expenditure is budgeted, with lower priority projects deferred. The FY16 capital expenditure guidance range of $175.8 to $197.8 million (AUD 240 to AUD 270 million) is summarized below.
As at June 30, Beach had a robust liquidity profile comprising cash on hand of $124.6 million (AUD 170 million), drawn debt of $109.9 million (AUD 150 million) and undrawn debt of $109.9 million (AUD 150 million). The FY16 capital expenditure program is expected to be fully funded in order to achieve a similarly strong liquidity profile at the end of FY16.
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