Beach sees revenue rise in 2022

15th August 2022 By: Esmarie Iannucci - Creamer Media Senior Deputy Editor: Australasia

PERTH (miningweekly.com) – ASX-listed Beach Energy has reported a 13% increase in revenues for the year ending June, reaching A$1.8-billion.

The company reported that earnings before interest, taxes, deprecation and amortisation (Ebitda) were up 17% on the previous financial year, to A$1.1-billion, while underlying net profits after tax were up 39%, to A$504-million.

“The 2022 financial year brought into sharp focus the important role natural gas currently plays in providing energy security, and will continue to do so for decades to come. Beach continues to play its part by investing in new gas supply for domestic users,” said CEO MorneĢ Engelbrecht

“Beach’s multi-basin strategy is to develop the assets within our portfolio, keep our plants processing at higher rates for longer, and in doing so maximise gas supply. The benefits of this strategy were clearly evident in our financial results this year.

“Despite lower production, increased demand and pricing for our products saw a rise in earnings and cash flows,” said Englebrecht.

“These results contributed to a strengthening of our financial position. We ended the year with total available liquidity of A$765-million and A$752-million in free cash flow pre-growth expenditure generated. This leaves Beach in great shape to deliver its current growth projects and balance longer-term growth aspirations with capital management initiatives.

“In the field, Beach is demonstrating its ability to deliver large and complex projects. Beach is safely achieving key milestones which are de-risking growth and strengthening the foundation for our 2024 production growth target.

“In the offshore Otway basin, the seven-well drilling campaign was successfully completed and delivered one new gas discovery at the Artisan field and six successful development wells in the Geographe and Thylacine fields. Geographe 4 and 5 were connected to the Otway Gas Plant and contributed to a 47% increase in Otway basin production. Connection of the final four wells in mid-2023 is targeted.

“In the Perth basin, the transformational Waitsia Stage 2 project commenced with good progress made on plant construction and development well drilling. First liquefied natural gas (LNG) sales in the second half of 2023 are targeted, which will herald Beach as a new entrant in the global LNG market,” he added.

“Another key milestone was the recent signing of the LNG sale and purchase agreement which will see BP purchase all 3.75-million tonnes of Waitsia Stage 2 LNG. This is equivalent to some 200-million MMBtu of LNG which represents material revenue from LNG to Beach over the five-year term.

“Beach also made good progress with its decarbonisation plans and has announced a new Emissions Intensity Reduction Target of 35% by 2030. We also maintain our aspiration to reach net zero Scope 1 and 2 emissions by 2050. A key plank of our emissions reduction journey is the globally significant Moomba carbon capture and storage (CCS) project. A final investment decision was taken in FY22 and we are targeting first carbon dioxide injection in 2024.

“We have a busy schedule in 2023 completing the major projects that will deliver material free cash flow from 2024. Key activities include connecting the Thylacine and Enterprise wells to the Otway gas plant, Waitsia Stage 2 progress, Perth basin exploration drilling, ongoing Cooper basin drilling, and planning for exploration and development activity in the Otway, Bass and Taranaki basins,” Engelbrecht said.

Looking ahead to 2023, Beach has set a production target of between 20-million and 22.5-million tonnes, compared with the 21.8-million tonnes produced in 2022, with capital expenditure targeted at between A$800-million and A$1-billion, which is in line with the A$872-million spent in 2022.