Beach Energy (BPT) keeps rolling a long nicely and remains on track for another very solid year, according to its March quarter production and financial update.
The company said it is on track to generate revenue of around $1 billion for the year to June, has more than $400 million of cash on hand and will invest more than that on exploration and development work.
March quarter revenue fell 19% from the December quarter thanks to lower sales volumes and lower prices.
But revenue was up a massive 49% on the March quarter of 2013, underlining how higher production from the Western Flank of the Copper Basin has helped boost the company’s financial position.
Beach said Western Flank production was maintained above the 10,000 barrels a day mark in the quarter and it enjoyed "record" Cooper basin oil production for the quarter from its operated wells.
Total 2013-14 oil production remains on track to reach the target of five million barrels.
The company enjoyed "strong" quarterly production of 2.3 million barrels of oil equivalent (MMboe), 7% down on the previous quarter, due to lower production of most products, and 28% up on the previous corresponding period (pcp).
Sales volumes of 2.3MMboe were 15% down on the December quarter, mainly due to lower seasonal gas demand (being summer) and timing of shipments. Sales though were up 21% on the same quarter of 2013.
That saw the company’s total revenue reach $231 million, 19% down from December, "mainly due to lower sales volumes and a reduction in commodity prices across most products”, but up 49% on the March quarter of last year.
BPT 1Y – Beach lifts Q3 output
Beach said it now expects 2013-14 financial year production "at the upper end of 9.2-9.6 MMboe guidance range”. It said it was still looking to spend around $500 million in capex in the year to June.
Directors said that Beach continued to enjoy a strong balance sheet, with "cash reserves up 6% to $428 million and undrawn $300 million debt facility”.
Beach CEO Reg Nelson said yesterday the strong production from the company’s Western Flank areas of the Cooper Basin had supported the quarterly performance, and the performance so far in 2013-14.
He said this was a payoff for investing in the Western Flank, and Beach will be employing this gained knowledge in areas on the Eastern Flank in the Tookoonooka Permit areas.
The company’s shares ended at $1.735, down 1.4% on the day, which gave Beach a market value of around $2.3 billion.
That’s a value that the merging Roc Oil (ROC) and Horizon Oil (HZN) can only aspire to after revealing details of their $800 million all-scrip merger which will create a company with oil and gas assets across Asia and Australasia.
Roc will offer stock to take over Horizon in a deal the pair are describing as an “all-scrip merger of equals”. (There’s no cash.)
Horizon shareholders will receive 0.724 shares in Roc for each Horizon share they own. Roc’s chairman Mike Harding will be chairman of the merged group, while Horizon chief executive Brent Emmett will be managing director.
Both boards unanimously support the merger. Roc shareholders will own about 42% of the new company, and Horizon shareholders about 58%.
