Beach Energy (ASX: ASX:BPT) has reported a sequential increase in oil and natural gas production for the final quarter of its 2024 fiscal year, driven by the commencement of output from the Enterprise field.
Significant Production Gains
In the three months ending June, Beach Energy produced 4.8 million barrels of oil equivalent (BOE), marking a 6% rise from the 4.5 million BOE produced in the fiscal third quarter. This brought the company’s annual output to an impressive 18.2 million BOE.
Financial Performance
The company reported quarterly sales revenue of AU$433 million (US$290.3 million), which was bolstered by AU$59 million from the lifting of a second liquefied natural gas (LNG) cargo from the Waitsia project in Western Australia. Additionally, higher average realized gas prices contributed to the revenue increase. For the entire fiscal year, Beach Energy's revenue reached AU$1.77 billion.
Key Operational Highlights
"Completing the Enterprise project and seeing the step-up in Otway Basin production was a major highlight from the quarter," said Brett Woods, Beach's chief executive. He noted that the Enterprise field performed well during testing, and the Otway Gas Plant operated reliably at higher rates, achieving nameplate capacity for the first time in over a decade.
Strategic Cost-Cutting Initiatives
In June, Beach Energy announced a strategic review aimed at reducing operating costs and capital expenditures. The company plans to cut unit field operating costs by 30% to AU$11.00 per BOE and sustaining capital expenditure by 20% to AU$450 million. These measures are intended to enable the company to break even at a free cash-flow level with an oil price of US$30 per barrel. As part of this initiative, Beach is considering the sale of three non-core assets.
Impairment Charge
On Friday, Beach Energy confirmed that it expects to recognise a pretax impairment charge of AU$365 million to AU$400 million in its full-year results. This charge is related to the company’s Taranaki and Bass Basin assets.