Beach Energy revenue up despite lower production

Beach Energy workers at Otway Gas Plant (warrego)
Beach Energy workers at Otway Gas Plant

Australian gas producer Beach Energy Limited has released its financial and operating results for FY22, which shows revenue increased 13 per cent despite lower production.

Beach Energy CEO Morné Engelbrecht said, “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.

Related article: Santos and Beach to increase domestic gas supplies

“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. Total revenue increased 13 per cent to $1.8 billion and underlying earnings before interest, tax, depreciation and amortisation increased 17 per cent to $1.1 billion.

“These results contributed to a strengthening of our financial position. We ended the year with total available liquidity of $765 million and $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 FY24 production growth target.”

In the offshore Otway Basin, Beach’s 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 per cent increase in Otway Basin production. Connection of the final four wells in mid-2023 is targeted.

Related article: Morné Engelbrecht appointed Beach Energy CEO

In the Perth Basin, the transformational Waitsia Stage 2 project commenced with progress made on plant construction and development well drilling. First LNG sales in the second half of 2023 is targeted, which will herald Beach as a new entrant in the global LNG market.

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 ~200 million MMBtu of LNG which represents material revenue from LNG to Beach over the five-year term.

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