PERTH (miningweekly.com) – Following a strategic review, Australian oil and gas producer Beach Energy has taken the decision to focus its efforts on Australia’s east coast, flagging the sale of its international assets.
The company in June announced its exit from Romania and, earlier this week, entered into a sales agreement over its Egyptian assets. Group executive Chris Jamieson told shareholders in a briefing on Wednesday that the company was also now in the early stages of farming down its Tanzanian permit and has initiated a sales process for its Browse and Carnarvon basin interests, in Australia.
The company has also identified marginal assets within its Cooper basin portfolio, which have been earmarked for potential divestment, pending a final review and recommendations.
Jamieson on Wednesday released a new vision for Beach, which would see the company optimise its core business in the Cooper basin, on the Australian east coast.
“We see the increasing demand for gas from the east coast market as a unique opportunity to really build on Beach’s position as a leading supplier to this market. This will involve not only commercialising existing assets within our portfolio, but also building a portfolio of assets in the east coast basins that support this endeavour,” he said.
Beach would grow its footprint in the Cooper basin through organic growth and value-accretive acquisitions, with Jamieson saying the company would continue to assess consolidation opportunities in the region.
To reach its aspirations, Beach would also look beyond the Cooper basin and other east coast basins for development opportunities, but Jamieson said the company would not venture too far from home.
“We will only venture into places that are geographically proximate to our home and where we can invest on a basis that gives us a good chance of succeeding and delivering value for our shareholders. As such, we will continue to pursue growth opportunities in other parts of Australia and, possibly, other places nearby.”
Jamieson noted that the company’s focus would also remain on financial flexibility to allow for exploration and inorganic growth options.
“A disciplined approach to capital management, while balancing our exploration risk exposure, will best position us to operate on a cash flow positive basis and preserve financial flexibility. This will allow us to take advantage of opportunities as and when they arise, as well as quickly ramping up exploration and appraisal efforts when market conditions improve.”
Beach earlier announced that it would cut back on capital expenditure (capex) during 2016, as the company battled lower oil prices. Capex of between A$240-million and A$270-million would be invested in 2016, compared with the A$416-million spent in the 2015 financial year.
Meanwhile, Jamieson noted that a whole-of-organisation review was still ongoing to determine the appropriate structure, capabilities and processes required to most effectively and efficiently deliver on the company’s strategic objectives.