d54a259752941dc8ad3f31.pdf
Annual Report
2015
Safety
Crea�vity
Respect
Innova�on
Performance
Teamwork
Our refreshed vision, purpose and values are clear and concise statements that define Beach as
an organisation. These statements have been developed to be enduring, and to navigate us
through the longer term.
Beach Energy
We are a proud Australian oil and gas company with a strong pioneering history
We have grown to become Australia's largest onshore oil producer with a major gas business
Our portfolio of strategically located oil and gas assets positions us for further growth
Our purpose
To deliver sustainable growth in shareholder value
Our values
Our values define us, guide our actions, our decisions and our words
Safety Safety takes precedence in everything we do
Creativity We continuously explore innovative ways to create value Respect We respect each other, our communities and the environment Integrity We are honest with ourselves and others
Performance We strive for excellence and deliver on our promises
Teamwork We help and challenge each other to achieve our goals
Our committed people and our values-based culture are our foundation for success
BEACH ENERGY LIMITED Annual Report 2015 - 1
About this report
This Annual Report is a summary of the operational activities during FY15 and the financial position of Beach Energy Limited as at 30 June 2015.
Beach Energy Limited (ABN 20 007 617 969) is a company limited by shares and is incorporated and domiciled in Australia. Beach Energy Limited is the parent company of the Beach consolidated group of companies. Unless otherwise stated, references to 'Beach', 'the Company', 'we'
and 'our' refer to Beach Energy Limited and its controlled entities as a whole. The text does not distinguish between the operations of the parent company and those of its controlled entities.
Reference to the financial year or 'FY' is to the year ended 30 June, unless otherwise stated. All dollar figures are expressed in Australian dollars unless otherwise stated.
Certain tables within this report may not add due to rounding.
Beach is continuing to reduce its environmental footprint by only sending printed annual reports to shareholders who have elected to receive one.
Competent persons statement
The reserves and resources information in this Annual Report is based on, and fairly represents, information and supporting documentation prepared by, or under the supervision of, Mr Tony Lake (Reservoir Engineering Manager). Mr Lake
is an employee of Beach Energy Limited and has a BE (Mech) degree from the University of Adelaide and is a member of the Society of Petroleum Engineers (SPE). The reserves and resources information in this Annual Report has been issued with the prior written consent of Mr Lake in the form and context in which it appears.
Annual General Meeting
Venue: Adelaide Convention Centre Address: North Terrace, Adelaide, SA 5000 Date: 10.30am,
Wednesday, 25 November 2015
Overview
2 About Beach Energy
-
Whole-of-organisation review
-
Performance review
-
Chairman's letter
-
Acting Chief Executive Officer's report
8 Directors
-
Executive management
Review of Operations
-
Production
-
Exploration and development
-
Drilling program
-
Reserves and resources
Sustainability
17 Sustainability report
32 Governance at Beach
Financial Report
34 Directors' report
-
Auditor's independence declaration
-
Remuneration report
70 Directors' declaration
71 Financial statements
75 Notes to the financial statements
111 Independent auditor's report
Shareholder Information
-
Glossary of terms
-
Schedule of tenements
116 Shareholder information
Christies Facility
Parsons Facility
Overview
'We have re‐defined our geographic boundaries by focusing close to home, which we believe provides our best chance for ongoing success.'
Strategy review, August 2015
9.15
million barrels of oil
equivalent produced
in FY15
51% 49%
About Beach Energy
Beach Energy is an ASX-listed oil and gas exploration and production company, with core operations in the Cooper and Eromanga basins, one of Australia's most prolific onshore oil and gas provinces. We are a values-based organisation, where safety takes precedence in everything we do. Beach is committed to sustainability and improvement of social, environmental and economic outcomes for the benefit of all stakeholders.
Beach has established a world-class operated oil business on the Western Flank of the Cooper Basin, and has grown to become Australia's largest onshore oil producer. We have an active drilling program and continue to explore across the Cooper Basin, including exploration drilling on the Eastern Flank in south-west Queensland.
Beach has a major gas business with strategic infrastructure, which is well positioned to take advantage of increasing growth in Australian east coast gas demand. Beach will also be further evaluating potential for gas production from deep coals in the centre and south of the Cooper Basin.
In addition, Beach has permits in other basins around Australia, including the Otway, Gippsland and Bonaparte basins, as well as permits in New Zealand. International operations further abroad have been curtailed so as to re-focus efforts closer to home.
Asset portfolio
Conventional Unconventional
Oil
Gas and gas liquids
Romania
Egypt Tanzania
Bonaparte Basin Browse Basin Carnarvon Basin
Cooper/Eromanga Basins
New Zealand
Cooper and Eromanga basins
Otway Basin Gippsland Basin
Bodalla
')
COOPER BASIN
')
Kenmore
Ballera
')
South Australia
') Lycium
Moomba
')
NAPPAMERRI TROUGH
') Jackson
Queensland
0 25 50 km
CE15-0006a
') Facility
Oil pipeline Gas pipeline
Beach operated permit Beach non-operated permit SACB and SWQ JVs
Whole-of-organisation review
During FY15, Beach completed two of three stages of a whole-of-organisation review. The review aims to clearly define Beach's medium and long-term strategies, and ensure the appropriate structure and capabilities are in place to achieve its strategic goals. The first stage, Assess Phase, was a broad ranging health check of the business. This laid the foundation for the second stage, Strategy Review, the main priority for which was to clearly define the ambition of Beach and develop an executable plan to achieve objectives.
Outcomes of the Strategy Review were communicated in August 2015. Beach's strategy is premised on a refreshed Vision: We aim to be Australia's premier multi-basin upstream oil and gas company, and a refreshed Purpose: To deliver sustainable growth in shareholder value. To achieve these goals, four strategic pillars were developed to drive all decision-making and serve as a roadmap for the future, as depicted in the image below.
In FY16, the final stage of the whole-of-organisation review, Organisational Model and Capability, will be completed. This stage will determine the appropriate structure, capabilities and processes required to most effectively and efficiently deliver on Beach's strategic objectives.
This whole-of-organisation review is the first step of an ongoing journey towards achieving
sustainable growth in shareholder value.
Our Vision
'The commitment from our staff is a key differentiator for Beach, and provides the foundation for ongoing success,
in both good and challenging times.'
Chris Jamieson Group Executive External Affairs
99%
Beach staff who stated they are committed to
To be Australia's premier
multi-basin
contributing to
Beach's success
upstream oil and gas company
|
e in the Coo
|
per Basin
|
|
Optimise
|
our cor
|
|
|
|
ementary gas coast basins
|
business
|
|
Build
|
compl in east
|
|
|
|
tible growth arby
|
in Australia
|
|
Pursue
|
compa and ne
|
|
|
|
al strength
|
|
Maintain
|
financi
|
|
|
Our Strategy
96%
Beach staff who stated they are proud to work for Beach
Staff survey May 2015
'FY15 was another outstanding year for operational excellence.'
Neil Gibbins Acting CEO
'Financial results
Performance review
Production (MMboe)
10
8
Sales revenue ($ million)
1,200
1,000
800
600
400
200
0
Operating cash flow ($ million)
600
500
400
300
200
100
0
were greatly
FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15
influenced by lower realised oil prices.'
Kathryn Presser Chief Financial Officer
$91m
|
25
|
270
|
5
|
|
240
|
|
20
|
210
|
4
|
|
180
|
Underlying EPS (cps)
15
10
5
0
Underlying NPAT ($ million)
150
120
90
60
30
0
Fully franked dividends (cps)
3
2
1
0
underlying
net profit after tax
FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15
Results for the past five years
|
FY11
|
FY12
|
FY13
|
FY14
|
FY15
|
|
Sales revenue
|
$ million
|
496
|
619
|
698
|
1,052
|
728
|
|
Net profit after tax
|
$ million
|
(98)
|
164
|
154
|
102
|
(514)
|
|
Underlying net profit after tax
|
$ million
|
42
|
122
|
141
|
259
|
91
|
|
Cash flow from operating activities
|
$ million
|
185
|
218
|
262
|
583
|
229
|
|
Market capitalisation at year end
|
$ million
|
1,009
|
1,180
|
1,440
|
2,171
|
1,365
|
|
Net assets
|
$ million
|
1,273
|
1,612
|
1,783
|
1,871
|
1,355
|
|
Production
|
MMboe
|
6.6
|
7.5
|
8.0
|
9.6
|
9.1
|
|
2P reserves
|
MMboe
|
77
|
93
|
93
|
86
|
74
|
|
2C contingent resources
|
MMboe
|
582
|
467
|
449
|
467
|
677
|
|
Gearing ratio
|
%
|
0.71
|
7.60
|
7.36
|
8.55
|
11.0
|
|
Earnings per share
|
cps
|
(8.81)
|
14.43
|
12.17
|
7.95
|
(39.64)
|
|
Underlying earnings per share
|
cps
|
3.89
|
10.72
|
11.15
|
20.26
|
6.99
|
|
Share price at year end
|
$
|
0.92
|
0.94
|
1.14
|
1.68
|
1.05
|
|
Dividends declared per share
|
cents
|
1.75
|
2.25
|
2.75
|
4.00
|
1.50
|
|
Franked amount per share
|
cents
|
1.75
|
2.25
|
2.75
|
4.00
|
1.50
|
|
Shares on issue
|
million
|
1,103
|
1,256
|
1,269
|
1,292
|
1,300
|
Chairman's letter
Our operated oil assets are world class, with substantial cash margins generated even at today's low prices, and our gas business is benefiting from higher returns........
Glenn Davis
INDEPENDENT NON-EXECUTIVE CHAIRMAN
Dear shareholder,
The past financial year has been one of rapidly changing industry dynamics. Oil prices have more than halved, with the market often driven by factors other than the underlying fundamentals of a business. Industry wide, the impact
on cash flows has been material and the impact on share prices marked. Despite that, the year has demonstrated the resilience of your company.
Operationally, we produced 9.15 MMboe, only marginally below last year's record. Beach remains Australia's largest onshore oil producer. It is very pleasing to note our operating results were achieved with a 60% decrease in Lost Time Incidents. Safety is paramount at Beach, and at the time of writing, we are LTI-free for the past 12 months. This is an outstanding achievement.
Financially, sales volumes of 10.5 MMboe were in line with the prior year, however, the declining oil price resulted in reduced earnings. We generated sales revenue of $728 million, operating cash flow of $229 million and underlying net profit after tax of $91 million. Beach ended the year in a financially sound position, with $170 million in cash and access to undrawn debt facilities.
Corporately, we have unfortunately lost Rob Cole as our Managing Director. Rob has put his family first, which all of us would do. Rob's contribution to Beach should in no
way be measured by the term of his tenure. His role in the articulation of our strategy, business planning, asset reviews and the commencement of our organisational review was invaluable and has set the compass for the future. We have commenced the process for the appointment of a permanent replacement. Whilst not able to continue as a full time executive, Rob will continue as a Non-Executive Director and we welcome him to the Board in that capacity.
During the year we welcomed Colin Beckett to the Board as a Non-Executive Director. Colin brings a wealth of knowledge to the Board, with over 35 years of engineering and commercial experience within the gas industry.
As you know, Beach's strategy is to:
-
Optimise our core in the Cooper Basin;
-
Build a complementary east coast gas business;
-
Pursue other nearby compatible growth opportunities; and
-
Maintain our financial strength.
As we continue to navigate current market conditions, we aim to maintain and build a portfolio with a blend of defensive attributes as well as growth opportunities consistent with that strategy.
Our operated oil assets continue to perform well and generate good returns, even at today's low prices, and our gas business is benefiting from higher returns following initiation of our supply agreement with Origin. The operating cash flows we generate fund our drilling program, which although curtailed in the coming year given market conditions, still provides a balance of exploration, appraisal and development activities.
The exploration and appraisal component gives us much to look forward to. We will shortly commence drilling on the Eastern Flank, with appraisal activities to follow on the Western Flank and deep coals to be tested in the south of the Cooper Basin.
We also continue to consider and investigate growth opportunities both inside and outside of the Cooper Basin in accordance with our strategy.
The commodity cycle shows no sign of turning in the immediate future. We are planning and budgeting on the 'lower for longer' scenario. If that scenario plays out, we are confident your company is well positioned.
In closing, I would like to thank our staff for their efforts over the past year, and you, our shareholders, for your ongoing support.
Glenn Davis, Chairman
28 September 2015
Acting Chief Executive Officer's report
........ what excites me about Beach is that we have world‐class capabilities based here in South Australia. The skill‐set and proprietary knowledge of our employees can and will be deployed across other basins in Australia and nearby as we continue to grow the business and our team.
It is with a great sense of pride that I write this report to you, the shareholder, on behalf of Beach Energy.
It has been an extremely busy past 12 months for the company, not only due to significant work undertaken as part of the whole-of-organisation review, but also because of challenges currently faced in global commodity markets.
Pleasingly, however, the operational and financial strength of Beach came to the fore during the past financial year.
As oil prices declined by over 50%, the underlying business demonstrated its robustness. Our ability to produce oil from the Western Flank at a cost of $25 - $30 per barrel (which includes operating costs, royalties and transportation) not only sets us apart from our peers, but also provides cash flow to support our ongoing drilling programs, even at these lower prices. Our oil business is indeed world-class. Alongside
our oil operations, Beach has a major gas business, which includes strategic infrastructure linking key east coast markets.
Our current transition to a long-term, oil-linked contract
for significant gas volumes is delivering benefits in terms of gas pricing, with leverage to increasing oil prices over time. These operations, along with a refreshed approach to capital allocation, have delivered a position of enviable financial strength.
Current challenges facing Beach
The health of our industry is greatly influenced by a broad range of macroeconomic and geopolitical factors which drive oil demand, supply and prices. Over recent times, the industry has been shaken by the rapid decline in oil prices, driven largely by the success of US shale production and the
reluctance of OPEC to curtail their output in response. Other factors such as weak demand in Europe and China and the potential for Iranian oil supply to increase, continue to weigh on oil prices.
Brent oil began FY15 priced at US$111 per barrel, and over the course of the financial year, Beach's average realised US$ oil price declined by 35%. A marked deterioration in confidence across the global sector accompanied this oil price decline.
Lower prices reduce revenue and net cash flows, which limit the ability to explore and invest compared to more buoyant times. The impact of such price declines is felt immediately, and challenges must be dealt with in real time. In particular, a company's focus quickly turns to preserving its financial
Neil Gibbins
ACTING CHIEF EXECUTIVE OFFICER
strength and access to liquidity, while balancing the need to continue investing for growth and the future. The response from oil and gas companies in Australia has been swift and significant. Here at Beach, measures implemented during FY15 include:
-
A 35% reduction in capital expenditure for the second half of FY15;
-
A major reduction in estimated FY16 capital expenditure to $240 - $270 million (from $416 million in FY15), with expenditure high-graded and discretionary projects deferred;
-
A strict and ongoing focus on operating and corporate costs, consistent with our objective to drive efficiencies and returns from all of our assets;
-
A reduction in headcount, including natural employee attrition, less reliance on external consultants and cessation of recruitment campaigns;
-
Adopting a 'lower for longer oil price' mindset when planning, involving conservative cash management and requiring both existing assets and new investments to justify their position in our portfolio; and
-
Implementation of our whole-of-organisation review, which took a top-down approach to confirm our strategy and the organisational structure and capabilities required to achieve our goals, efficiently and effectively.
Opportunities for the industry and Beach
The current challenges and actions taken, have not dampened my enthusiasm about the outlook for the industry and
Beach. From an industry perspective, the Cooper Basin region continues to be one of Australia's premier oil and gas provinces, with over 3,000 wells drilled, 800 of which have been fracture stimulated, and uninterrupted production for
the better part of 40 years. Despite its long history, I know our technical team is very excited by the basin's future prospects, both in conventional and unconventional plays. Discoveries such as the prolific Bauer oil field in the overlying Eromanga Basin, deep coal potential in the Patchawarra Trough and in the south of the Cooper Basin, and early results from recent gas drilling campaigns have confirmed and further encouraged our positive view of the potential.
........ we have just achieved 12 months of LTI‐free operations........ this is an outstanding
Hours worked and Lost Time Injuries
Hours (million) LTIs
1.5 8
6
1.0
4
1.3 1.1 1.0 0.9
As we navigate current challenges and opportunities, the resource industry more than ever needs the support of State and Federal Governments to stimulate ongoing investment. Here at Beach we are thankful for a pro-business environment in South Australia, and I would like to acknowledge support provided by the Government to Beach and our industry more generally. This has included retention licenses over a number of our oil and gas permits, development of an all-weather airstrip which is underway near Innamincka, and consideration of the deferral of royalty payments for unconventional
achievement
0.5
2 production.
0 0
FY13 FY14 FY15 LTM
Hours worked LTIs
The Cooper Basin region is also a fundamental pillar of our strategy, which we announced in August. The strategy is our roadmap for achieving our vision of becoming Australia's premier upstream oil and gas company, which in turn underpins our objective to deliver sustainable growth in shareholder
value. The four pillars of our strategy are as follows.
-
Optimise our core in the Cooper Basin
The first principle of the strategy review was to identify and understand our core business, and then ensure we have
a clear plan to drive the core business to its full potential. Our core is the Cooper Basin and we are convinced there is significant untapped potential remaining in the basin.
-
Build a complementary gas business in east coast basins
We see the increasing gas demand from the east coast market as a significant opportunity to build on Beach's position as a leading supplier to this market. This will involve not only commercialising existing assets within our portfolio, but also building a portfolio of assets in east coast basins that support this endeavour.
-
Pursue compatible growth opportunities in Australia and nearby
To become the company we aspire to be, we believe we need to look beyond the Cooper and Eromanga basins and other east coast basins, but not too far beyond. We will only venture into places that are geographically proximate to our home, where we can invest on a basis that gives
us a good chance of success and deliver value for our shareholders. As such, we will continue to pursue growth opportunities in other parts of Australia and, possibly, other places nearby.
-
Maintain financial strength
Maintaining our financial strength is critical in these challenging times. We need this to support exploration and inorganic growth options. A disciplined approach to capital management, while balancing our exploration risk exposures, will best position us to operate on a cash flow positive basis and preserve financial flexibility. Forward programs have been framed to achieve an appropriate
mix of development projects, to maintain solid production performance, combined with exploration and appraisal projects to position the company for future growth.
Prudent capital management and cost control will also allow us to take advantage of opportunities as and when they arise, as well as responding appropriately when market conditions improve.
Beach's values-based culture
During my 18 years with Beach, I have become increasingly proud of our company culture, and it was very pleasing
to review the Assess Phase results from our whole-of- organisation review. A detailed survey was distributed to
staff, and the responses, in my opinion, validated my long-held beliefs. Firstly, the survey participation rate of 94% impressed not only me, but also the survey facilitators. Secondly,
the dedication of our staff was evidenced by the following statistics:
-
99% stated they are committed to contributing to Beach's success;
-
96% stated they are proud to work for Beach; and
-
95% stated they are motivated to do what is required to
meet Beach's goals and strategy.
These are remarkable differentiators and provide the foundation for ongoing success - in good times or challenging times. Furthermore, what excites me about Beach is that we have world-class capabilities based in South Australia. The skill-set and knowledge of our employees can and will be deployed across other basins in Australia and nearby, as we continue to grow the business.
Beach's values-based culture is also evident in our recent safety performance. Not only have our lost time injuries (LTI) progressively reduced over past years, but we have just achieved 12 months of LTI-free operations, which captures both our permanent staff and contractors. This is an outstanding achievement. Safety takes precedence in all of our operations, and we are continually working to improve our processes and safety outcomes.
In summing up, I would like to thank the Board, the Executive team and all staff for their efforts during the past financial year. We are clearly working through a challenging period, but with our strategy in place to act as a roadmap for future growth, I am confident we will emerge from this current period stronger and better positioned to deliver sustainable growth in shareholder value and benefits for all of our stakeholders.
Neil Gibbins,
Acting Chief Executive Officer 28 September 2015
Directors
Glenn Davis
Independent Non-Executive Chairman - LLB, BEc, FAICD
Glenn is a solicitor and principal of DMAW Lawyers, a firm he founded. He joined Beach in July 2007 as a non-executive director and was appointed non-executive Deputy Chairman in June 2009 and Chairman in November 2012. Glenn brings
to the Board his expertise and experience in the execution of large legal and commercial transactions and corporate activity regulated by the Corporations Act and ASX Limited.
Glenn is a director of ASX listed companies Monax Mining Limited (since 2004) and a former director of Marmota Energy Limited (from 2007 to June 2015).
Glenn's special responsibilities include membership of the Risk Committee and Remuneration and Nomination Committee.
Robert Cole
Independent Non-Executive Director
- BSc, LLB (Hons)
Rob joined Beach Energy as Managing Director in 2015. Prior to this, he held the position of Executive Director and Executive Vice President Corporate and
Commercial at Woodside Petroleum Limited. In 2012 he was appointed
to the Board of Woodside becoming one of two executive
directors on the Board.
Subsequent to year-end, Rob announced his resignation as Managing Director of the Company and was appointed Independent Non-Executive Director.
John Butler
Lead Independent Non-Executive Director - FCPA, FAICD, FIFS
John joined Beach in June 1999 as a non-executive director, having been previously the alternate director to Reg Nelson from 1994 to 1998.
John's special responsibilities include chairmanship of the Audit Committee and membership of the
Risk Committee and Corporate Governance Committee.
John was appointed Lead Independent Director on 1 July 2014.
Belinda Robinson
Independent Non-Executive Director
- BA, MEnv Law, GAICD
Belinda joined Beach in May 2011. She is the Chief Executive and Executive Director of Universities Australia, the national body representing Australia's 39 universities to Government.
Belinda's special responsibilities
include chairmanship of the Remuneration and Nomination Committee and membership of the Risk Committee.
Fiona Bennett
Independent Non-Executive Director
- BA (Hons), FCA, FAICD, FAIM
Fiona is a Chartered Accountant with over 30 years' experience in business and financial management, corporate governance, risk management and audit.
Fiona is currently a director of Hills Limited (since 2010) and a former
director of Boom Logistics Limited (from 2010 to June 2015).
Fiona's special responsibilities include chairmanship of the Risk Committee, membership of the Audit Committee and Remuneration and Nomination Committee.
Doug Schwebel
Independent Non-Executive Director
- PhD, BSc (Hons) - Geology
Doug has over 30 years' experience in the resources sector, having
held various senior executive positions with ExxonMobil, including Exploration Director for its Australian upstream subsidiaries. He is currently a director of Tap Oil Limited
(since 2012) and has also served as a non-executive director on the boards of Roc Oil Limited and Great Artesian Oil & Gas Limited.
Doug's special responsibilities include membership of the Risk Committee, Audit Committee and Reserves Committee.
Colin Beckett
Independent Non-Executive Director
- FIEA, MICE, GAICD
Colin joined Board in 2015 and brings experience in engineering design, project management, commercial negotiations and gas marketing. Colin previously held senior executive positions at Chevron Australia Pty Ltd, most recently as the General Manager
responsible for the development of the Gorgon LNG and domestic gas project. Colin is currently the Chancellor of Curtin University, Chairman of Perth Airport Pty Ltd, Chairman of Western Power and a past Chairman and board member of APPEA.
Colin's special responsibilities include membership of the Risk Committee and Corporate Governance Committee.
Executive management
Neil Gibbins
Acting Chief Executive Officer (and Executive Vice President Australian Oil and International)
- BSc (Hons) - Geophysics
Neil joined Beach in 1997, initially in the role of Chief Geophysicist.
Appointed as Chief Operating Officer in 2010, Neil manages Beach's exploration, development and
production programs and budgets for Australia, New Zealand
and Tanzania.
Kathryn Presser
Chief Financial Officer and Company Secretary (and Executive Vice President Corporate Services)
- BA (Accounting), Grad Dip CSP, FAICD, FCPA, FGIA, FCIS, AFAIM
Kathryn joined Beach in 1997 and was appointed to the role of Company Secretary in 1998. Appointed as the Chief Financial
Officer in 2005, Kathryn has over 25 years' specific expertise in corporate financial and strategic accounting roles and
is a qualified chartered secretary. She is a Fellow of the Governance Institute of Australia, CPA Australia, AIM - Australia and the Institute of Company Directors. She recently served on the SA and NT State Council of the Governance Institute of Australia, is a member of the Petroleum Exploration Society of Australia, a Director of Mawson Petroleum Pty Ltd and also serves on other not-for-profit boards.
Gordon Moseby
Group Executive Portfolio Management (and Executive Vice President Planning)
- BE (Hons) - Petroleum
Gordon joined Beach in 2002 and is currently in charge of the Corporate Planning and Portfolio areas, with
a focus on optimising Beach's portfolio performance. Gordon is a
member of the Society of Petroleum Engineers, the Petroleum Exploration Society of Australia and the Australian Institute of Company Directors.
Rod Rayner
Group Executive Commercial (and Executive Vice President Australian Gas) - BSc (Hons) - Geology, GAICD
Before joining Beach in 2011, Rod was an industry consultant who was involved in the successful acquisition and divestment of the Tipton West coal seam methane project.
Rod has served as director of the
Queensland Mining Council, the Queensland Resources Council, and for a period chaired the Exploration Committee of that body.
Cathy Oster
General Counsel and Joint Company Secretary (and Executive Vice President Sustainability) - BA (Jurisprudence), LLM (Corporate and Commercial), FGIA, FCIS
Cathy was appointed Joint Company Secretary in 2005 and General Counsel in 2012. She has more than 25 years' experience as a lawyer
and a partner in private practice, advising on corporate
and commercial transactions. Cathy is a qualified chartered secretary, a member of the Governance Institute of Australia, the Law Society of South Australia, the Australian Institute
of Company Directors and the Australian Corporate Lawyers Association. She also serves on the SA and NT State Council of the Governance Institute of Australia.
Chris Jamieson
Group Executive External Affairs
- BCom, Grad Dip App Finance and Investment, Dip Investor Relations, FCPA, FFinsia
Chris joined Beach in 2010 and was appointed Group Executive External Affairs in 2014. Chris previously worked at Normandy Mining Ltd and Ernst & Young in
the areas of mergers and acquisitions, financial due diligence and corporate strategy. As Group Executive External Affairs, Chris has responsibility for Investor Relations, Public Relations, Government Relations and Sponsorships.
Matthew Squire
Group Executive Corporate Development - BE (Hons)
- Mechanical, BA (Economics), Grad Dip App Finance and Investment
Matt joined Beach in 2012 and was appointed to the role of Group Executive Corporate Development in 2014. Matt previously held
a number of senior corporate
development positions within the energy industry at Origin, Santos and British Gas. He has been involved in several major acquisitions and divestments and specialises in economic and technical business review. As Group Executive
Corporate Development, Matt has responsibility for corporate transactions and new venture opportunities.
Michael Dodd
Acting Chief Operating Officer
- BSc (Hons) Geology
Michael was appointed Acting Chief Operating Officer on 16
September 2015. Michael has been the General Manager Exploration and Development since July 2014, managing Beach's exploration and development programs and budgets
for Australia. Michael joined Beach in 2007, initially in the role of Senior Geologist.
Review of Operations
Production
Beach produced 9.15 million barrels of oil equivalent, 51% of which was oil and 49% gas and gas liquids. This
was 4.7% lower than prior year production due primarily to natural field decline, partially offset by drilling successes and increased infrastructure capacity.
The Company's oil and gas production is predominantly derived from the Cooper and Eromanga basins, located in the north-east of South Australia and south-west of Queensland. Production was also derived from Egyptian operations, which subsequent to year-end were the subject of a binding sale agreement.
Total oil production was 4.6 MMbbl, down 11% from record levels in the prior year. This reduction was mainly due to natural field decline, partially offset by successful drilling campaigns and infrastructure upgrades. Within the Western Flank, strong oil production from operated and non-operated permits continued, with average gross daily production of 19,875 bopd. Most production was transported via the Lycium hub to Moomba trunkline, with excess production trucked as required. Net production from the Western Flank was 3.4 MMbbl, or 9,389 bopd.
Gas and gas liquids production was 4.5 MMboe, up 3% from the prior year, mainly due to increased well head capacity.
Cooper / Eromanga basins
Oil
Ex PEL 91
(Beach 40% and operator, Drillsearch 60%)
Gross oil production of 4.1 MMbbl (1.6 MMbbl net) was down 11% from the prior year, with average daily gross production of 11,263 bopd (4,505 bopd net). Natural field decline was partly offset by accelerated development of the Bauer Field.
Six wells of a 10-well Bauer Field development campaign were tied-in, with a Bauer facility upgrade completed
toward the end of the financial year. This upgrade increased water handling capacity from 50,000 bfpd to 75,000 bfpd. Installation of the Stunsail and Pennington facilities, each with handling capacity of 20,000 bfpd, and associated trunklines to the Bauer to Lycium network also commenced toward the end of the financial year.
Ex PEL 92
(Beach 75% and operator, Cooper 25%)
Gross oil production of 1.5 MMbbl (1.1 MMbbl net) was down 26% from the prior year, with average daily gross production of 4,110 bopd (3,083 bopd net). Lower production was
mainly due to natural field decline, but partially mitigated by installation of additional flowlines and a separator cleaning campaign, both completed late in the financial year.
Ex PEL 104 / 111
(Beach 40%, Senex 60% and operator)
Gross oil production of 1.6 MMbbl (0.7 MMbbl net) was up 4% from the prior year, with average daily gross production of 4,502 bopd (1,801 bopd net). Natural field decline was offset by stronger than expected production from the Spitfire Field, and the Martlet-1 exploration well coming online.
Queensland Oil (Beach 100%)
Production of 176,000 barrels was up 4.7% from the prior year. Minor infrastructure upgrades contributed to sustained production levels.
|
Production comparison
|
|
Area
|
FY15
|
FY14
|
|
Oil (MMbbl)
|
Gas Liquids (MMboe)
|
Gas (PJ)
|
Oil Equivalent (MMboe)
|
Oil Equivalent (MMboe)
|
|
Ex PEL 91
|
1.6
|
-
|
-
|
1.6
|
1.8
|
|
Ex PEL 92
|
1.1
|
-
|
-
|
1.1
|
1.5
|
|
Ex PEL 111
|
0.1
|
-
|
-
|
0.1
|
0.2
|
|
Ex PEL 104
|
0.5
|
-
|
-
|
0.5
|
0.4
|
|
Beach Queensland
|
0.2
|
-
|
-
|
0.2
|
0.2
|
|
Ex PEL 106
|
-
|
0.1
|
1.4
|
0.3
|
0.5
|
|
SACB and SWQ JVs
|
0.9
|
0.6
|
20.7
|
5.1
|
4.9
|
|
Total Cooper / Eromanga
|
4.5
|
0.7
|
22.1
|
9
|
9.5
|
|
Egypt
|
0.1
|
-
|
0.1
|
0.1
|
0.1
|
|
Total
|
4.6
|
0.7
|
22.2
|
9.1
|
9.6
|