Highlights - Beach Energy

Period ending 30 June 2011
Highlights
Corporate
●● Beach appointed Belinda Robinson as an additional Independent NonExecutive Director to its Board in May.
●● The remaining shares held in Ramelius Resources were sold, generating a
further profit from that booked in December 2010 of $3.3 million and cash
flow of approximately $25 million.
Operations
●● Total production for the full year of 6.6 MMboe.
●● June quarter production of 1.6 MMboe, an increase of 4% on the March
quarter, mainly due to improved access to the SACB JV tenement areas.
●● Success at the first two PEL 91 exploration wells, Hanson-1 and Snellings-1.
●● Successful development and appraisal drilling program in PEL 92 at
the Parsons and Butlers Oilfields, which, along with continued strong
production performance, has led to a net reserve addition of approximately
2.3 MMbbl across the permit.
contacts
Beach Energy Ltd
ABN: 20 007 617 969
ASX Code: BPT
25 Conyngham Street
GLENSIDE SA 5065
GPO Box 175
ADELAIDE SA 5001
●● Drilling programs continue on the Western flank despite final flood pulses
reaching the region. Tel: +61 8 8338 2833
Fax: +61 8 8338 2336
●● Equity interest in Abu Sennan, Egypt, assigned in April with the signing of
the Deed of Assignment by the Minister of Petroleum.
Web:
www.beachenergy.com.au
Email:
[email protected]
●● Three new Saxon rigs mobilised for infill drilling in the SACB JV and SWQ
JV tenements.
Subsequent Events
●● Successful flows at the Holdfast-1 shale gas well with initial gas rate of up
to 2 MMscf/d.
●● The ATP 855P dispute with Icon has been resolved, with Icon transferring
a 40% interest in the tenement to Beach (subject to Ministerial approval).
Financial
Investor Relations:
Chris Jamieson
Tel: +61 8 8338 2833
Media:
Ian Howarth
Collins Street Media
Tel: +61 3 9223 2465
directors
Independent Non-executive Chairman
Robert Kennedy
Managing Director
Reg Nelson
●● A new revolving corporate credit facility of $150 million has replaced the
existing $35 million working capital facility.
Independent Non-executive Deputy Chairman
●● Net cash of $173 million, an increase of 8% on the March quarter.
Independent Non-executive Directors
Glenn Davis
John Butler
Franco Moretti
Neville Alley
Belinda Robinson
Quarterly Activity Report 30 June 2011
Highlights
Key Statistics
Jun 2010 Quarter
Mar 2011 Quarter
Jun 2011 Quarter
Qtr on Qtr
Change
Full Year
FY11
Production (kboe)
1,626
1,507
1,566
4%
6,550
Sales (kboe)
2,340
2,074
1,843
(11%)
8,821
Revenue ($ million)
125.8
122.3
108.9
(11%)
496.5
Oil Price ($ per bbl)
89.4
112.8
114.3
1%
96.5
Net cash ($ million)
169.9
160.6
173.3
8%
173.3
Reg Nelson
28 July 2011
Managing Director
Ref: #087/11
This report contains information on Beach’s Reserves and Resources which have been compiled by Mr Gordon Moseby, who is
a full time employee of Beach, is qualified in accordance with ASX listing rule 5.11 and has consented to the inclusion of this
information in the form and context in which it appears.
CORPORATE
Beach generated a further profit of $3.3 million to
June 2011 (after brokerage) from the sale of its entire
shareholding in Ramelius Resources Limited. This
profit is in addition to a $13.6 million profit realised
from the mark to market of the investment for the six
months to December 2010. Cash generated from the
transaction totalled approximately $25 million. SUBSEQUENT EVENTS
The reservoir stimulation and subsequent flow test of
the Holdfast-1 shale well in the Cooper Basin resulted
in an initial rate of 2 MMscf/d, which stabilised at 1.8
MMscf/d through a 32/64 choke.
Beach and Icon resolved the ATP 855P dispute, with
both companies executing a farmin agreement and
Icon transferring a 40% interest in ATP 855P to Beach
(subject to Ministerial approval). Beach has committed
to drill a horizontal pilot unconventional well in ATP
855P, with Icon contributing $1.75 million toward the
cost of this well.
Page 2
Quarterly Activity Report 30 June 2011
PRODUCTION, SALES & REVENUE
Planning is currently underway to install a new pipeline
connection from PEL 92 to Moomba.
Production
Sales
Production during the quarter was 1.6 MMboe, 4% higher
than the previous quarter (1.5 MMboe), primarily due to
improved access to the Santos operated Cooper Basin
areas, partially offset by the temporary closure of the
Santos operated Tantanna oil pipeline. Total oil and gas sales volumes for the June quarter
were 1.8 MMboe, a decrease of 11% from the March
quarter, mainly due to:
Production from Beach’s operated areas in the Cooper
Basin, particularly in the Western Flank, was below
expectations primarily due to the Tantanna to Moomba
pipeline, which is undergoing an integrity review. Oil
volumes are being trucked at approximately 4,000
barrels of oil per day (gross), down from a rate of 6,000
barrels of oil per day (gross) before the interruption.
●● Trucking of Western Flank oil; and
●● Timing of oil shipments.
Revenue
Revenue of $108.9 million for the June quarter reduced
by 11%, mainly due to:
●● Lower sales volumes; partially offset by
●● Higher prices.
Jun 2010
Quarter
QUARTERLY PRODUCTION
Mar 2011
Quarter 1
Jun 2011
Quarter 2
Qtr on Qtr
Change
Full Year
FY11
Cooper Basin
496
505
449
(11%)
2,033
Gippsland Basin
41
–
–
–
64
Williston Basin
0
10
7
(29%)
26
Total Oil
537
515
456
(11%)
2,123
Sales Gas and Ethane (PJ)
Cooper Basin
5.5
4.9
5.5
12%
22.0
LPG (kt)
Cooper Basin
9.9
9.2
11.1
21%
42.1
Condensate (kbbl)
Cooper Basin
69
73
84
15%
321
1,626
1,507
1,566
4%
6,550
Oil (Kbbl)
TOTAL OIL AND GAS (kboe)
1
Final reconciled production figures.
2
Preliminary data for SACB/SWQ JV’s and Williston.
Gas flare at
Holdfast-1
Page 3
Quarterly Activity Report 30 June 2011
Jun 2010
Quarter
QUARTERLY SALES
Jun 2011
Quarter 1
Qtr on Qtr
Change
Full Year
FY11 1
Cooper and
Eromanga Basins
691
635
446
(30%)
2,686
Gippsland Basin
107
3
–
(100%)
98
–
2
13
450%
25
Total Oil
798
640
459
(28%)
2,808
Sales gas and Ethane (PJ)
Cooper Basin
8.2
7.6
7.0
(7%)
30.9
LPG (kt)
Cooper Basin
8.6
7.5
12.8
72%
45.4
Condensate (kbbl)
Cooper Basin
69
70
70
0%
338
2,340
2,074
1,843
(11%)
8,821
Oil (kbbl)
Williston Basin
TOTAL OIL and GAS (kboe)
1
Mar 2011
Quarter
Includes sales of oil and gas purchased from third parties for the June quarter of 88 kbbl (536 kbbl YTD) and 2.0 PJ (7.3 PJ YTD) respectively
Jun 2010
Quarter
A$000
Mar 2011
Quarter
A$000
Jun 2011
Quarter 1
A$000
Cooper and
Eromanga Basins
61,929
71,811
51,185
(29%)
260,626
Gippsland Basin
9,419
291
–
(100%)
8,306
–
194
1,320
581%
2,172
Total Oil
71,349
72,296
52,505
(27%)
271,104
Cooper Basin
54,425
50,044
56,375
13%
225,342
125,773
122,340
108,880
(11%)
496,446
Average Realised Price (A$/boe)
53.8
59.0
59.1
0%
56.3
Average Realised Oil Price (A$/bbl)
89.4
112.8
114.3
1%
96.5
QUARTERLY REVENUE
Oil
Williston Basin
Gas and Gas Liquids
TOTAL OIL and GAS
Qtr on Qtr
Change
Full Year
FY11 1
A$000
Includes sales of oil and gas purchased from third parties for the June quarter of $10.3 million ($50.6 million YTD) and $8.4 million
($29.1 million YTD) respectively.
1
Jun 2010
Quarter
A$ million
Mar 2011
Quarter
A$ million
Jun 2011
Quarter
A$ million
Qtr on Qtr
Change
Full Year
FY11
A$ million
Exploration and Appraisal
6.6
14.3
23.2
62%
62.7
Development, Plant and Equipment
17.4
22.6
35.1
55%
97.9
TOTAL
24.0
36.9
58.3
58%
160.6
QUARTERLY CAPITAL EXPENDITURE
Page 4
Quarterly Activity Report 30 June 2011
EXPLORATION and DEVELOPMENT
Capital expenditure
Capital expenditure increased by 58% in the June quarter,
primarily due to improved access and subsequent increase
in expenditure on the Western Flank and within the SACB
JV and SWQ JV areas.
AUSTRALIA
COOPER and EROMANGA BASINS
The roads approaching the Kudnarri Bridge are
currently cut off due to final flood pulses which are
expected to remain for up to two more months. All
the necessary supplies are now at the Gunyah supply
depot, ensuring that the exploration, appraisal and
production programs, set down for the Western Flank
oil tenements, will continue unabated.
Beach Operated – Development
PEL 106FI Gas Development Project
(Beach 50%)
The PEL 106 Joint Venture will be progressing the
development of its Brownlow and Middleton fields
through the laying of new pipeline utilising the Fiberspar
flexible pipe technology. The commissioning of this
development is expected toward the end of 2011.
PEL 92 (Beach 75%)
The second exploration well, Stenhouse-1, encountered
oil shows in the Namur Sandstone, however, evaluation
of wireline logs indicated no significant hydrocarbons
present and the well was plugged and abandoned.
The third, fourth and fifth exploration wells, Turton-1,
Westall-1 and Wheatons-1, did not encounter
hydrocarbons and were also plugged and abandoned.
The rig has now moved to the Rincon-1 site where it is
expected to spud in late July 2011.
PEL 91 (Beach 40%)
A five well exploration campaign commenced in
mid-May with the Ensign#18 rig drilling the first
well, Hanson-1, which was a Namur oil discovery
and subsequently cased and suspended as a future
oil producer. Oil shows in the Birkhead Formation
were drill-stem tested (DST), however, commercial
hydrocarbons were not recovered. It is expected that
Hanson-1 will be connected in the third quarter of
2011.
Western Limit
of Cooper Basin
sediments
0
20
KILOMETRES
The Western Flank drilling campaign in PEL 92
delivered success at the Parsons-3 and Parsons-4 wells (in the March quarter), and Parsons-5, Butlers-2 and
Butlers-3 wells (in the June quarter). All were cased
and suspended as future oil producers. Preliminary
assessment indicates the Butlers and Parsons
development program has added more than 1.4 MMbbl
of (gross) reserves to date. Cooper
Creek
PEL 91
PEL 92
Snellings-1
Parsons-3 & 4
The Butlers oil production facility is planned for
installation and commissioning by the end of September
2011, with the facility design currently undergoing final
review and approval.
Parsons-5
Butlers-3
Hanson-1
Kudnarri
Bridge
Butlers-2
Brownlow
Middleton
PEL 106B
Beach Operated – Exploration
PEL 92 (Beach 75%)
The Ensign#30 rig drilled the first exploration well of
the PEL 92 Western flank campaign, Parham-1, which
did not encounter hydrocarbons and was subsequently
plugged and abandoned. Beach Permit
2011 drilling
WESTERN FLANK
COOPER BASIN
CE11-0078
Page 5
Quarterly Activity Report 30 June 2011
The second well, Snellings-1, resulted in a new-field oil
discovery at the top of the Namur Sandstone. A DST
of the uppermost Namur Sandstone recovered 31.5
barrels of oil during a 2-hour flow period, with the well
cased and suspended as a future producer. The commencement of the 432km2 Aquillus 3D seismic
survey is expected in the third quarter of 2011, with the
survey area to be modified based on accessibility.
PEL 218 (Beach 90%)
The reservoir stimulation of the Holdfast-1 shale well in
the Cooper Basin was undertaken during June in seven
stages. The target zone was the Roseneath, Epsilon and
Murteree (REM) formations and the deeper tight gas
target, the Patchawarra Formation. The data gathered
from this process indicates the intervals fractured
vertically, favouring horizontal wells for the future pilot
and production phases.
It should be noted that the preparation of the
stimulation fluids for Holdfast-1 were in accordance
with the new stringent guidelines introduced in
Queensland for such fluids. After initial cleanup and flow back of the reservoir
stimulation fluid, the well commenced flowing gas
at an initial rate of 2 MMscf/d, which stabilised at
1.8 MMscf/d through a 32/64 choke. The well rate
has declined in line with expectations to around 1.0
MMscf/d, with further assessment of all aspects of the
performance of the well to take place over the coming
months. The composition of the gas appears to be in
line with that produced historically in the Cooper Basin
region. The flow stimulation of the Encounter-1 shale well
has been delayed as a result of a mechanical problem
with the completion. The lead time for replacement
equipment is in the order of three months, resulting
in the flow stimulation of Encounter-1 to likely be the
end of 2011.
Non-Beach Operated – Development
Santos operated - Gas and Permian Oil
Development (Beach 20.21%)
Two of the three new build Saxon rigs were used
for gas development drilling during the quarter. Moomba-184, -185, -186, -187 and Nephrite South-6
were all successful gas development wells.
Moomba-184, - 186 and -187 were cased and suspended
as future Toolachee Formation gas producers.
Moomba-185 was deepened to assess the shale gas
potential of the REM sequence. Both core and DST flow
data will be taken from -185 to examine the potential
of the shales in the Moomba field. Nephrite South-6 was cased and suspended as a future
Patchawarra gas producer. The Saxon rigs are currently drilling and coring the
Tindilpie-11 well and the Nephrite South-8 well.
Senex operated (Beach 40%)
Due to the current flooding event, the proposed
development drilling campaign for the Growler Field
(PRL 15) was delayed. The operator anticipates the
campaign will commence in the third quarter 2011.
Non-Beach Operated – Exploration
Santos operated – Oil
The third new Saxon rig drilled the Wandilo South-1 oil
exploration well in the Naccowlah Block in Queensland
(Beach 38.5%). The well was plugged and abandoned
after failing to encounter significant hydrocarbons. The
rig is currently completing the Zeus-2 well (Beach 30%).
Senex operated (Beach 40%)
Due to the current flooding event, the exploration
drilling campaign for PEL 104 and PEL 111 was delayed. The operator anticipates the campaign will commence
in the third quarter 2011.
OTHER
Basker-Manta-Gummy (Beach 30%)
Preparation of the BMG field to a non-production
phase continued during the quarter, including the
demobilisation of the Crystal Ocean FPSO to Malaysia. The evaluation of options for a separate Phase-2 gas
development continues.
Geothermal - Paralana Project (Beach 21%)
The main fracture stimulation of Paralana-2 was
undertaken successfully in June. A flow test is planned
to be undertaken during the third quarter 2011.
Page 6
Quarterly Activity Report 30 June 2011
PRL 2, Gippsland Basin, (Beach earning up to
50% - Lakes Oil Farmin)
It is anticipated that fracture stimulation of the
Wombat-4 well will take place during the third quarter
2011.
INTERNATIONAL
EGYPT
North Shadwan (Beach 20%)
Beach has been advised that the Processing and
Transportation agreement for NS377 oil, using a thirdparty pipeline, is being finalised. Planning of a possible
trucking option for excess production is currently being
considered, with first oil anticipated in Q4 2011.
Abu Sennan (Beach 22%)
The Al Ahmadi-1 well has spudded and is being
drilled vertically to a total depth of 3,570 metres. Al
Ahmadi-1 is 700 metres west and 160 metres up-dip
of GPZ-1 (drilled in 1982) which encountered oil shows
throughout the Abu Roash and Bahariya Formations.
The GPZZ-4 well reached a total depth of 4,715 metres
with oil shows encountered throughout the Cretaceous
section. A second rig has been mobilised to undertake
cased hole tests of four prospective intervals in the
well.
BADR EL DIN 05
Egypt
SHEIBA 18 1
BADR EL DIN 04
ABU EL GHARADIG NE
BADR EL DIN 01
ABU EL GHARADIG
GPT
SOUTHWEST
ABU
SENNAN
Lake Tanganyika South (Beach 100%)
Interpretation of the airborne data has been completed. Significant information regarding geological structural
features has been derived. The results from the
interpretation will be used to plan the 2D seismic
program.
Beach has signed a contract with Fugro Oceansismica
for the 2D seismic acquisition. Fugro is finalising its
subcontractor agreements and organising the seismic
boat, the support boats as well as equipment for the
2D seismic, which is expected to commence in the
fourth quarter 2011.
ALBANIA
Durresi Block (Beach 25%)
The Durresi 3D seismic survey (840km2) was completed
in April 2011. The weather remained benign during the
survey and data quality is reported to be very good.
Processing of the seismic data is ongoing at Western
Geophysical in the UK.
South Antelope, Williston Basin (Beach (USA)
Inc - various percentages)
GPY
GPT
TANZANIA
USA, North Dakota
WESTN DESERT 33
GPZZ
ABO SENAN
The 2D seismic program in the Mesaha Concession has
now been completed and covers a total of approximately
2,500 kilometres. Preliminary interpretation has
confirmed the presence of major structural features,
including tilted fault-block geometries and intra-basinal
highs. Final interpretation will identify drilling targets
set down for a campaign expected to commence in the
second half of 2012.
BW 1
BADR EL DIN 11
GPZZ-4
Mesaha (Beach 15%*)
Al Ahmadi
Henderson production is above forecast due to higher
than anticipated flow rates from the 26-35H well.
WESTN DESERT
33/15
BARAKA NE
EL DIYUR WEST
Beach Energy Permit
Other Permits
Oil Field/Pipeline
Gas Field/Pipeline
Well
ABU SENNAN
0
30
KILOMETRES
EG10-0028
* Subject to Ministerial approval.
Page 7
Quarterly Activity Report 30 June 2011
DRILLING PROGRAM
Beach participated in sixteen conventional oil and gas wells during the June quarter, 69% of which were successful.
Wells
Successes
Success
Rate
Exploration - Oil
7
2
29%
Hanson-1, Snellings-1
Appraisal - Oil
1
1
100%
Butlers-2
Development - Oil
2
2
100%
Butlers-3, Parsons-5
Development - Gas
5
5
100%
Moomba-184, 185, 186, 187,
Nephrite South 6
Exploration/Appraisal - Oil
1
1*
100%
GPZZ-4
Total
16
11
69%
Area
Category
Cooper Basin
Egypt
Name
* Cased and Suspended for future testing.
FINANCIAL INFORMATION
Cash and equity
CAPITAL
STRUCTURE
Mar 2011
Quarter
Jun 2011
Quarter
Qtr on Qtr
Change
Fully paid
ordinary shares
1,099,021,290
1,103,127,711
0%
Unlisted
employee options
10,183,238
8,677,257
(15%)
Unlisted
employee rights
10,017,082
10,017,082
0%
Beach continues to be in a strong financial position
with cash reserves of $173.3 million at quarter end,
nil debt and a $150 million revolving corporate
facility at its disposal.
Cash reserves increased by $12.7 million, primarily
due to the sale of Ramelius Resources shares.
Oil Hedging
Beach entered into a new oil hedge (AUD
60/bbl Brent Put (Floor)) during the
quarter for the following:
●● January 2012 to September 2012●
– 40,000 bbl/month
●● October 2012 to December 2012●
– 35,000 bbl/month
Currency Hedging
All currency hedging has now expired and
has not been replaced as all oil hedging is
now done in AUD.
OIL HEDGED AT
AUD50/bbl
AUD55/bbl
AUD60/bbl
Total
Hedged
Volumes
(bbls)
360,000
630,000
600,000
1,590,000
315,000
315,000
915,000
1,905,000
Brent floors
Period
2011/2012
2012/2013
Total
360,000
630,000
Page 8
Quarterly Activity Report 30 June 2011
APPENDIX 1 – GLOSSARY
$ Australian dollars
LPG Liquefied petroleum gas
1P Proved
MMbbl million barrels of oil
2P Proved and Probable
MMboe million barrels of oil equivalent
3P Proved, Probable and Possible
MMscfd million standard cubic feet of gas per day
bbl barrels
MMscf million standard cubic feet of gas
PEL Petroleum exploration license
bbl/MMcfd barrels per million standard cubic feet of●
gas
BCF billion cubic feet
boe
barrels of oil equivalent - the volume●
of hydrocarbons expressed in terms of●
the volume of oil which would contain●
an equivalent volume of energy. (For●
example, 1 BCF of gas equals●
approximately 0.18 million boe,●
the exact conversion being dependent●
on the gas composition)
PJ petajoule
SACB JV South Australian Cooper Basin Joint●
Venture
TJ terajoule
YTD Year to date
bopd barrels of oil per day
boepd barrels of oil equivalent per day
bwpd barrels of water per day
BMG Basker-Manta-Gummy oil and gas fields●
in the Gippsland Basin, offshore Victoria
capex Capital expenditure
DST Drill stem test
EBITDAX Earnings
before
Interest,
Tax,●
Depreciation and Amortisation and●
Write-downs.
EPT Extended Production Test
Frac Fracture stimulation
FY Financial year
GJ gigajoule
Impress Impress Energy Limited
kbbl thousand barrels of oil
kboe thousand barrels of oil equivalent
kt thousand tonne
LNG Liquefied natural gas
Page 9