Shares in the Kerry Stokes-controlled Beach Energy jumped yesterday after it announced plans to buy Senex Energy’s assets in Cooper Basin for $87.5 million.
This will make Beach Energy the only operator in the Western Flank in the South Australian Cooper Basin, located in the upper northeast of the state, near Birdsville, in far western Queensland.
The shares closed up 7.6% at $1237 yesterday at the close.
“This transaction is immediately earnings accretive for shareholders, with initial estimates pointing to approximately $5 million in annual operating cost savings, expected to be realised in the first year post-acquisition,” CEO Matt Kay told the ASX.
“Pleasingly, the new acreage contains more than 10 drill-ready oil and gas prospects, providing additional upside potential. These prospects will be integrated into our growth portfolio as drilling candidates from 2021-22.”
Beach Energy said becoming the only operator in the Western Flank meant it could simplify field operations. It will also become the full owner of Western Flank infrastructure.
Beach reckons there are $5 million in savings already identified post-purchase.
The company currently expects to produce 600,000 barrels of oil equivalent in 2020-21.
Oil prices improved nearly 1% on Monday, with West Texas Intermediate crude rising to $US37.18 a barrel, the highest price in a week and reversing an early fall of more than 4% after last week’s 10% slide.
