Beach predicts higher output and capital spend in 2014
PERTH (miningweekly.com) – ASX-listed Beach Energy has increased its production expectations for the 2014 financial year following strong quarterly results for the three months to December.
The oil and gas producer on Thursday said that production was expected to reach between 9.2-million and 9.6-million barrels of oil equivalent, up from the previous guidance of between 8.7-million and 9.3-million barrels of oil equivalent.
During the second quarter under review, Beach produced 2.5-million barrels of oil equivalent, up 1% on the previous quarter, owing to record oil production. The miner said that the majority of the 1.3-million barrels of oil was produced from the Western Flank operations, which confirmed the acreage’s ability to deliver continued strong production.
Sales volumes for the quarter were down 4% on the previous quarter, to 2.8-million barrels of oil equivalent, mainly owing to a reduction in gas demand, but this was partly offset by record oil sales, Beach said.
Record quarterly revenue of A$287-million was achieved during the period under review, on the back of the record oil sales, and the continued strong brent crude oil price, as well as the increased realised price across all products.
Meanwhile, the miner also reported a 58% increase in capital spend during the quarter, and warned shareholders that capital expenditure (capex) during the year would also increase from the initial estimate of between A$420-million and A$480-million, to between A$450-million and A$500-million.
The increase in the projected spend was mainly owing to updated figures received for the company’s Delhi operations, which include the South Australian Cooper Basin joint venture (JV) and the South West Queensland JV.
However, Beach expressed its confidence in being able to fund the capex from its full-year operating cash flow, its existing cash balance and its current finance facilities.
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