PERTH (miningweekly.com) – Oil and gas producer Beach Energy has reduced its expected full-year capital spend from between A$405-million and A$455-million, to between A$370-million and A$400-million.
The ASX-listed company said on Tuesday that the tightening of capital spend during the 2018 financial year was as a result of Beach deferring noncore maintenance capital projects at its offshore assets, in conjunction with ongoing capital efficiencies in the Cooper basin.
Beach CEO Matt Kay told shareholders that the company was currently undertaking its yearly asset review, following the A$1.58-billion acquisition of Lattice Energy, with a focus on applying the company’s low cost, fit-for-purpose operating model to the new offshore asset base, and determining optimal capital work programmes, project ranking and sequencing across the entire portfolio.
Beach reported record production of 6.6-million barrels of oil equivalent during the three months to March, up from the 2.6-million barrels of oil equivalent reported in the December quarter, as the Lattice Energy assets were integrated into the Beach portfolio.
Sales volumes for the quarter were also up by 143%, to 6.8-million barrels of oil equivalent, resulting in sales revenues of A$393-million.
“While I am encouraged by the first steps we have taken, there is still more to be done, especially as we continue to drive business synergies. We remain on track to meet our synergy target of A$50-million per annum by the end of 2019,” Kay said about the Lattice integration.
At the Cooper basin operations, Beach also reported a 20% increase in oil production during the quarter, along with an 89% drilling success rate, which included three horizontal development wells that will be monitored to confirm their anticipated superior return potential, which has led to the identification of further horizontal well locations that will be drilled in 2019.
“Our success in the Cooper basin supports our target of maintaining 2018 Cooper basin production over 2019 and 2020,” Kay said.
Beach on Tuesday tightened its production guidance for the full 2018, from the previous guidance of between 25.5-million and 27.6-million barrels of oil equivalent, to between 26-million and 27-million barrels of oil equivalent.