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Beach struggles under falling oil prices

Beach struggles under falling oil prices

Photo by Bloombeg

27th October 2015

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – Despite reporting a slight increase in sales volumes for the three months to September, ASX-listed Beach Energy's sales revenue fell 15% on the back of the falling oil price.

Sales volumes for the quarter were up 1% quarter-on-quarter to 2.5-million barrels of oil equivalent, while sales revenue declined from the A$170.2-million reported in the June quarter, to A$145.2-million.

The slight increase in sales volumes resulted from higher gas demand during peak winter months and the initiation of an oil-linked gas sales agreement with Origin.

Production volumes for the same period remained unchanged at 2.26-million barrels of oil equivalent.

Meanwhile, Beach reported on Tuesday that capital expenditure (capex) for the first quarter decreased by 36% on the June quarter, to A$44-million, consistent with the company’s curtailed spending programme for the full 2016.

For the full year, capex was expected to reach between A$240-million and A$270-million, as lower oil prices were expected to continue. Beach had invested A$416-million in capex in the 2015 financial year.

Beach recently announced a merger with fellow-listed Drillsearch Energy to create a A$1.1-billion midcap oil and gas company. Under the terms of the agreement, Beach has agreed to acquire all Drillsearch shares through a scheme of arrangements, with Drillsearch shareholders offered 1.25 Beach shares for every Drillsearch share held.

Edited by Chanel de Bruyn
Creamer Media Online Managing Editor

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