PERTH (miningweekly.com) – ASX-listed Beach Energy is reviewing the cost and timing of its Waitsia Stage 2 project, saying on Thursday that the company can no longer maintain its previously targeted schedule or capital estimates for the project.
Beach in February this year flagged a cost increase at Waitsia Stage 2, after reaching an agreement with contractor Webuild to complete the project build, after the fall of Clough.
Following Webuild’s due diligence and review of costs and work schedule, Beach revised the capatial expenditure for Waitsia Stage 2 from the original A$350-million to A$400-million to between A$400-million and A$450-million.
However, the company on Thursday said that the ongoing tight labour market, in Western Australia in particular, had impacted construction progress, creating a range of uncertainty in outcomes. Review of cost and schedule by the Waitsia joint venture operator and Webuild is ongoing to identify and implement opportunities to mitigate impacts on the project and constrain the range of uncertainty.
Beach told shareholders that it would provide an update when this review was concluded, but maintained that the Waitsia project remained strongly value accretive and a key element in the company’s future growth.
The final investment decision on the Stage 2 project was reached in December 2020. The development involves the drilling of up to six wells, construction of a new 250 TJ/d gas processing facility and associated gas gathering infrastructure.