Beach Energy has unveiled an ambitious target of lifting output by 13% a year between now and 2024.
The company, 30% controlled by Kerry Stokes’ Seven Group, told the market Tuesday in an investor briefing that it is targeting an increase in output equivalent to 28 million barrels of oil by 2024.
Beach produced 25.6 million barrels of oil equivalent in 2020-21.
This represents a compound annual growth rate of 13 per cent for the business, and will see the company concentrate its focus on gas in Victoria, New Zealand and WA as well as the Cooper Basin.
Beach said the ambitious growth target “is fully funded and delivered through development projects already in execution phase.
Investors took the shares up 10.5% to $1.365 on details of the update and the continuing rise in global oil and gas prices.
Beach confirmed a deal with global major, BP which will see the company acquire all 3.75 million tonnes of Beach’s expected LNG volumes from the Waitsia Gas Project north of Perth.
Beach is also targeting a cut in its emissions by a quarter by 2025, using 2018 as a baseline year, and has also outlined an aspirational target of net zero emissions by 2050.
“Beach’s corporate strategy focuses on filling our gas plants and supplying gas into the tightening Australian East Coast, New Zealand gas and international LNG markets,” CEO Matt Kay said in the presentation.
Kay said the company’s diversified base business is slated to deliver material gas production growth in the near-term, through the recently completed Kupe Inlet Compression project, future connection of the Offshore Otway wells and delivery of the Waitsia Stage 2 Gas Project.
“Beach’s corporate strategy focuses on filling our gas plants and supplying gas into the tightening Australian East Coast, New Zealand gas and international LNG markets,” Mr Kay said.
“The successful delivery of first gas from the Kupe Inlet Compression project and the recently signed HOA with bp for all our marketed Waitsia Stage 2 LNG volumes represent the first runs on the board as we look to deliver our growth strategy.
“The offshore Otway and Waitsia Stage 2 developments are expected to provide significant production uplifts over the next two years, with the first of the offshore Otway wells on track to be connected in early 2022 with the recent Geographe 4 and Geographe 5 results meeting pre-drill expectations.
“Once complete, this investment program is expected to see Beach’s gas business generate material stable free cash flows from our eight plants by the end of 2023, providing us with multiple free cash generation options,” he said in Tuesday’s statement.
