PERTH (miningweekly.com) – Oil and gas producer Beach Energy on Thursday announced the launch of a multiyear capital spend programme, designed to appraise undeveloped reserves and prospective resource potential in the Cooper basin.
The company told shareholders that in 2018, some A$220-million to A$260-million would be spent, with Beach hoping to produce between 10-million and 10.6-million barrels of oil equivalent during that financial year.
A production of at least 10-million barrels of oil equivalent has also been targeted for 2019 and 2020.
Beach noted that the expanded capital programme had been designed to maximise production and recovery from existing fields, prove commerciality and determine optimal development plans for recent discoveries, and deliver optimal exploration and development drilling campaigns for future years.
“The programme continues to demonstrate Beach’s strict focus on value accretive capital allocation. Approximately 75% of expected 2018 capital expenditure (capex) is classified as discretionary and meets strict investment hurdles and return requirements,” the company said in a statement.
“Due to the low-cost, fast payback nature of Beach’s Cooper basin acreage, approximately two-thirds of discretionary expenditure is allocated to projects with expected internal rates of return greater than 60%.”
The remaining capex in 2018 is stay-in-business and committed expenditure, which is required on existing assets for maintenance, regulatory commitments and contractual obligations.