PERTH (miningweekly.com) – Federal Resources Minister Keith Pitt has welcomed an announcement by ASX-listed Beach Energy of exploration success at its Enterprise gasfield in the Victorian Otway basin.

Beach on Monday announced a net 2P undeveloped reserve of 21-million barrels of oil equivalent for the Enterprise gasfield, which includes 97 PJ of sales gas, 211 000 t of liquefied petroleum gas and two-million barrels of condensate at an initial gas-condensate yield of around 25 barrels/million standard cubic feet.

Beach MD and CEO Matt Kay said the reserves booking for the Enterprise field was a fantastic achievement for the company, with the results ahead of pre-drill expectations.

“The material Enterprise discovery helps to ensure a continued pipeline of gas to the Otway gas plant, a key supplier to the East Coast gas market. The liquids content in the field is more than double our pre-drill expectation, significantly increasing the value of the discovery,” said Kay.

“Ultimately, Beach’s investment in the region and our joint venture participation is helping to meet the shortfall in supply that is forecast for the East Coast gas market in the near future, as well as providing an economic boost to the region and creating jobs through the supply chain.”

Beach is planning to start front-end engineering activities during the second half of this year, and is targeting a final investment decision in 2022, with targeted first gas by the first half of 2023.

The company also plans to investigate further exploration opportunities in the vicinity of the Enterprise field, with plans to use the existing drill pad.

Pitt has welcomed Beach’s success at the Enterprise gas and condensate field, saying it added important reserves to the Victorian gas supply.

“I congratulate Beach Energy on their success at Enterprise, which is reward for their continued investment and confidence in the potential of offshore gas in south-east Australia,” Pitt said.

“The Beach success demonstrates that there continues to be a bright future for the offshore sector which remains critical to meeting the Australian government's commitment to a gas-led recovery.

“This is a great example of the industry operating safely and successfully in an environmentally important area like offshore Port Campbell. It is contributing to the local, regional and national economy and co-existing with important local industries like tourism,” Pitt said.

“I would urge the Victorian state government to follow Queensland and the Northern Territory by unlocking other gas potential onshore in the state and remove its ban on unconventional gas exploration.

“The experience of the US shale gas industry is that development of onshore gas can increase competition, lower prices, reinvigorate manufacturing and bring on new jobs and lower emissions,” the Minister said.

Meanwhile, Beach Energy on Monday reported that production for the half-year ended December had been in line with the first half of 2020, reaching 13-million barrels of oil equivalent.

Revenues for the half-year declined by 23% on the previous corresponding period, to A$726.3-million, while net profits after tax for the same period declined by 54%, to A$128.7-million, despite sales volumes remaining unchanged at 13.4-million barrels of oil equivalent.

The fall in revenue was driven by lower realised liquid prices, attributable to the economic impact of the Covid-19 pandemic, higher foreign exchange rates and lower third party sales, Beach told shareholders.

Kay noted that while operations at the company’s Western Flank oilfields were not as expected during the half-year, with higher-than-expected decline rates recorded at a number of the wells, the company’s first half was one that delivered key milestones across the portfolio.

“When you take stock of what has happened in the past six months, its extremely pleasing to see we have well and truly set the foundations for growth. It's not every day you can look back at a half and say you reached a final investment decision at a liquefied natural gas (LNG) project the scale of Waitsia, delivered a material liquids rich gas discovery in the Otway basin, and executed two value accretive acquisitions.

“Most importantly, the first half of 2021 was our safest on record, with the company achieving a record one-million hours injury free.”

The company has updated its 2021 production guidance from the previous 26-million to 28.5-million barrels of oil equivalent, to between 25.5-million and 26.5-million barrels of oil equivalent.