Australia's Beach Energy Reduces Production Volume, Capex for FY16

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.

Production Volumes

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.

Capital Expenditure

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.

Capital Expenditure

  • Development
    • Cooper Basin (South Australian Cooper Basin or SACB and South West Queensland or SWQ JVs)
      • FY15A: $167.0 million (AUD 228 million)
      • FY16 Guidance: $106.3-117.3 million (AUD 145-160 million)
    • Cooper Basin (non SACB and SWQ JVs)
      • FY15A: $32.9 million (AUD 45 million)
      • FY16 Guidance: $32.9-36.6 million (AUD 45-50 million)
    • International
      • FY15A: $8.8 million (AUD 12 million)
      • FY16 Guidance: -
    • Total Development Expenditure
      • FY15A: $208.9 million (AUD 285 million)
      • FY16 Guidance: $139.3-154.0 million (AUD 190-210 million)
  • Exploration
    • Cooper Basin (SACB and SWQ JVs)
      • FY15A: $5.1 million (AUD 7 million)
      • FY16 Guidance: $3.7-7.3 million (AUD 5-10 million)
    • Cooper Basin (non SACB and SWQ JVs)
      • FY15A: $27.8 million (AUD 38 million)
      • FY16 Guidance: $21.9-25.6 million (AUD 30-35 million)
    • Unconventional
      • FY15A: $43.9 million (AUD 60 million)
      • FY16 Guidance: $3.7 million (AUD 5 million)
    • International
      • FY15A: $13.9 million (AUD 19 million)
      • FY16 Guidance: $3.7 million (AUD 5 million)
    • Other Australia
      • FY15A: $5.1 million (AUD 7 million)
      • FY16 Guidance: $3.7 million (AUD 5 million)
    • Total Exploration
      • FY15A: $96.0 million (AUD 131 million)
      • FY16 Guidance: $36.6-43.9 million (AUD 50-60 million)
  • Total Capital Expenditure
    • FY15A: $304.8 million (AUD 416 million)
    • FY16 Guidance: $175.8-197.8 million (AUD 240-270 million)

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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