Beach Energy Limited | Quarterly report for the period ended 31 December 2021

For personal use only

ASX Announcement

FY22 Second Quarter Activities Report

Reference #003/22

Date 25 January 2022

Quarterly production of 5.3 MMboe, revenue of $398 million and net cash position maintained

  • Q2 production of 5.3 MMboe, 7% below the prior quarter due to a combination of natural field decline, planned and unplanned maintenance in the Cooper Basin JV and Western Flank and primarily unplanned downtime at BassGas, partially offset by increased production at Kupe and Beharra Springs
  • Q2 sales revenue of $398 million, up 3% due to higher LPG sales and higher realised liquids pricing, offset by lower gas and condensate sales volumes due to production impacts
  • Liquidity increased to $673 million and net cash position of $73 million at 31 December 2021

First gas from Otway offshore development and Yolla wireline campaign

  • First gas from the Otway offshore campaign was delivered to the Otway Gas Plant via Geographe 4 and 5, effectively doubling the potential production at the Otway Gas Plant up to ~180 TJ/d
  • Thylacine North 1 drilled, and flow tested - in line with pre-drill expectations
  • Completed wireline work on Yolla 6 - uplifting and extending production to Lang Lang Gas Plant

Waitsia development drilling program set to commence in the Perth Basin

  • Rig secured and committed to five Waitsia development wells, with drilling to commence in Q3
  • Additional three to six exploration and development wells in surrounding permits subject to approvals

Western Flank development drilling in-line with expectations

  • Four horizontal development wells drilled in the Western Flank oil fields, in-line with pre-drill expectations, with a fifth well drilling ahead at quarter end
  • All wells to be connected and brought online throughout Q3 to reduce decline rate
  • Rig moving to appraisal drilling in Martlet oil field and targeting oil exploration late February

FID on Moomba CCS project taken in November 2021 with JV Participant and operator Santos

  • Clean Energy Regulator registered, creating a crediting period of 25 years Australian Carbon Credit Units

Snapshot

Dec

Sept

Dec

Qtr on Qtr

FY22

Q2 FY21

Q1 FY22

Q2 FY22

Change

YTD

Production (MMboe)

6.20

5.71

5.31

(7%)

11.02

Pro-Forma Production (MMboe)1

6.55

5.71

5.31

(7%)

11.02

Sales Volumes (MMboe)

6.44

5.76

5.48

(5%)

11.24

Sales Revenue ($ million)

344

388

398

3%

786

Realised Oil Price ($/bbl)

65.3

110.3

117.1

6%

113.6

Realised Sales Gas/Ethane Price ($/GJ)

7.3

7.5

7.6

2%

7.5

1Pro forma production includes the impact of the acquisition of Senex Energy's Cooper Basin assets and Mitsui's Bass Basin assets, with effective date 1 July 2020.

For further information contact the following on +61 8 8338 2833

Investor relations

Adam Stokes, Investor Relations Advisor

Media

Chris Burford, Corporate Affairs Manager

Beach Energy Limited

Page 1 of 17

Beach Energy Limited | Quarterly report for the period ended 31 December 2021

For personal use only

First gas from Otway offshore campaign highlights Q2 results

Beach Energy has released its Second Quarter Activities Report for FY22, in which gas from Beach's offshore Otway development campaign were, for the first time, delivered into the East Coast gas market.

Quarterly production of 5.3 MMboe was down 7% on the prior period due to natural field decline, planned and unplanned downtime in Cooper Basin JV and Western Flank and primarily unplanned downtime at Bass Gas. This was partially offset by increased quarterly production at Kupe and Beharra Springs.

Quarterly revenue rose 3% to $398 million, due to higher realised gas and liquids prices, supported by improving domestic and global product demand. This was partially offset by lower production volumes.

Beach's Acting Chief Executive Officer Morné Engelbrecht said delivering first gas from the Otway Offshore represented a key milestone for the company.

"This is an exciting time at Beach as we set the key building blocks as part of our strategic production growth target of 28 MMboe in FY24," Mr Engelbrecht said.

"Last quarter it was first gas from the Kupe Inlet Compressor program and this quarter it was Geographe 4 and 5 coming online to deliver new volumes into the East Coast gas market."

"Our offshore drilling campaign continues in the Otway Basin, where the Thylacine North 1 well has been successfully drilled, in line with our pre-drill expectations."

On the safety front Beach also reached seven years without a Lost Time Injury at its Otway Gas Plant during the quarter demonstrating Beach's ongoing commitment to safety.

Mr Engelbrecht said the business continues to execute its growth program in FY22.

"At Waitsia Stage 2, our joint venture with Mitsui has executed a rig contract with Easternwell for the upcoming Perth Basin drilling campaign commencing this quarter. This campaign includes a minimum of five development wells in Waitsia and will be followed, subject to approvals, by further development and exploration drilling in the surrounding acreage," Mr Engelbrecht said.

"In the Cooper Basin, 13 of 14 oil and gas development wells were successful in Q2, including all the Western Flank oil development wells. The Western Flank development wells will be brought online through Q3 to further reduce the decline rate."

"We are currently drilling appraisal wells in the Martlet oil field and the rig will then move to drill a sequence of 11 oil exploration wells from late February through to April."

"It's important to remember our base case does not rely on success of the oil exploration and appraisal wells, so any success will be on top of what we presently forecast."

Mr Engelbrecht said reaching FID on the Moomba Carbon Capture and Storage project was also a major achievement for the business.

"Once operational, this Project will deliver a material reduction to Beach's equity emissions and forms a key pillar of our aspiration to reach net zero emissions by 2050," Mr Engelbrecht said.

"Natural gas will continue to be a critical source of energy supporting the transition to a lower carbon future. We are committed to meeting the dual needs of developing new gas supplies while also reducing our own Scope 1 and 2 emissions footprint.

Beach Energy Limited

Page 2 of 17

Beach Energy Limited | Quarterly report for the period ended 31 December 2021

Financial

FY22 Half Year results and guidance update is scheduled for 14 February 2022.

For personal use only

Sales volume

Quarterly sales volumes decreased 5% on the prior quarter to 5,481 kboe due to reduced production from all products, partially offset by timing of LPG liftings at Port Bonython in the quarter.

Gas sales and ethane volumes fell 6% and condensate was down 13% on the prior quarter following natural field decline, production downtime due to both planned and unplanned maintenance in the Cooper Basin JV and Western Flank and primarily unplanned downtime at BassGas. This was partially offset by higher sales volumes from Kupe and Beharra Springs, supported by higher production.

Oil sales volumes fell 4% on the prior quarter, primarily due to a lower contribution from Western Flank oil production.

Dec

Sept

Dec

Qtr on Qtr

FY22

Q2 FY21

Q1 FY22

Q2 FY22

Change

YTD

Own Product

2,004

1,154

1,085

(6%)

2,240

Oil (kbbl)

Third Party

223

152

8%

315

163

Total Oil

2,227

1,306

1,248

(4%)

2,554

Sales Gas

Own Product

19.7

20.8

19.6

(6%)

40.4

Third Party

0.1

0.5

0.3

(38%)

0.8

and Ethane

(PJ)

Total Gas

19.8

21.3

19.9

(6%)

41.2

Own Product

48.7

41.6

49.7

19%

91.3

LPG (kt)

Third Party

0.2

0.1

123%

0.2

0.1

Total LPG

48.9

41.7

49.8

20%

91.5

Condensate

Own Product

418

475

414

(13%)

889

Third Party

2

0

1

204%

1

(kbbl)

Total Condensate

420

475

415

(13%)

890

Total Oil and Gas Sales (kboe)

6,444

5,762

5,481

(5%)

11,243

Total - Own Product (kboe)

6,201

5,529

5,267

(5%)

10,796

Total - Third Party (kboe)

243

232

215

(8%)

447

Note: Figures and ratios may not reconcile to totals throughout the report due to rounding.

Beach Energy Limited

Page 3 of 17

Beach Energy Limited | Quarterly report for the period ended 31 December 2021

For personal use only

Sales revenue

Quarterly sales revenue of $398 million increased 3% to the prior quarter due to increased LPG liftings at Port Bonython and higher realised pricing across all products, in particular oil, condensate and LPG prices, which continue to be supported by increasing global demand.

This was partially offset by lower gas revenue, down 4% and condensate, down 3% on the prior quarter due to lower production following planned and unplanned downtime at facilities.

$ million

Dec

Sept

Dec

Qtr on Qtr

FY22

Q2 FY21

Q1 FY22

Q2 FY22

Change

YTD

Oil

145

144

146

1%

290

Sales Gas and Ethane

144

159

152

(4%)

311

LPG

30

37

53

46%

90

Condensate

25

48

47

(3%)

95

Sales Gas and Gas Liquids

199

244

252

3%

496

Total Oil and Gas Revenue

344

388

398

3%

786

Total - Own Product

329

369

376

2%

745

Total - Third Party

15

19

22

11%

41

Note: Figures and ratios may not reconcile to totals throughout the report due to rounding.

Average realised price

The average realised price across all products was $72.6 per boe, up 8% on the prior quarter.

Realised average LPG pricing increased 22%, primarily due to continued strengthening of the underlying benchmark LPG price index. The realised oil price increased 6% to $117.1 per bbl, supported by a continued recovery in global oil prices from prior quarter as global demand continues to recover from the COVID-19 slowdown.

Dec

Sept

Dec

Qtr on Qtr

FY22

Q2 FY21

Q1 FY22

Q2 FY22

Change

YTD

All products ($/boe)

53.4

67.3

72.6

8%

69.9

Oil ($/bbl)

65.3

110.3

117.1

6%

113.6

Sales Gas and Ethane ($/GJ)

7.3

7.5

7.6

2%

7.5

LPG ($/tonne)

611

879

1,070

22%

983

Condensate ($/bbl)

59.3

102.0

113.1

11%

107.2

Beach Energy Limited

Page 4 of 17

Beach Energy Limited | Quarterly report for the period ended 31 December 2021

For personal use only

Capital expenditure

Second quarter FY22 capital expenditure was $221million, up 13% on the prior quarter. Development, plant and equipment spend increased 16% as the development drilling campaign commenced in the Western Flank and offshore Otway drilling activities continued.

$ million

Dec

Sept

Dec

Qtr on Qtr

FY22

Q2 FY21

Q1 FY22

Q2 FY22

Change

YTD

Exploration and Appraisal

55

26

25

(3%)

51

Development, Plant and Equipment

125

169

196

16%

366

Total

180

195

221

13%

417

Liquidity

At 31 December 2021, Beach had liquidity of $673 million, comprising $213 million of cash reserves and $460 million in undrawn facilities. The Company has drawn down $140 million under the new $600 million committed revolving credit facility and ended the quarter with net cash of $73 million, an increase of $30 million on the prior quarter.

$ million

Dec

Sept

Dec

Qtr on Qtr

Q2 FY21

Q1 FY22

Q2 FY22

Change

Cash Reserves

114

193

213

11%

Drawn Debt

(160)

(150)

(140)

(7%)

Net Cash/(Debt)

(46)

43

73

71%

Undrawn Facilities

290

450

460

2%

Capital structure

Beach's capital structure as at 31 December 2021 is set out below.

Sept

Dec

Qtr on Qtr

Q1 FY22

Q2 FY22

Change

Fully paid ordinary shares

2,281,333,656

2,281,333,656

-

Unlisted employee rights

6,773,827

6,533,225

(240,602)

Hedging

As at 31 December 2021, Beach had no hedging in place.

Beach Energy Limited

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Beach Energy Limited published this content on 24 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 January 2022 22:16:10 UTC.