Australia’s Beach Energy cuts gas reserves estimate

Australian independent Beach Energy has slashed its total proven and probable (2P) gas reserves following revisions of some assets under a strategic review concluded in June.

The firm revised its estimated oil and gas reserves downwards by 31.5mn bl of oil equivalent (boe) in 2023-24, of which 11.5mn boe was attributed to re-evaluation at Enterprise reservoir. This, combined with a 7pc on-year drop in output to 18.2mn boe in 2023-24, brought the firm's 2P oil and gas reserves to 205mn boe as of 30 June, down by 20pc from 255mn boe at the same date last year.

Beach maintained its production guidance for 2024-25 of 17.5mn-21.5mn boe, which it said is wider than typical to account for uncertainty on the timing of Waitsia's production ramp-up.

Pressures are declining faster than anticipated at Beach's Enterprise and Thylacine North fields in Victoria state's Otway basin, Beach said on 12 August when announcing the company's full-year results to 30 June. Reprocessed seismic testing at the Beharra Springs Deep field and results at the Beharra Springs Deep 2 well in Western Australia's Perth basin also led to a downgrade in estimates.

"Following the Enterprise field coming on line on 12 June, which has flowed at peak rates of up to 68 TJ/d (1.8mn m³/d), early pressure data indicates a smaller resource pool than originally estimated," Beach said.

Beach disclosed in June that drilling results at the Kupe South 9 well in New Zealand's Taranaki basin had shown low gas flow rates, contributing to cumulative impairments in 2023-24 of A$1.1bn ($720mn).

A lack of political support for the gas sector and the designation of Kupe as a non-core asset has led the firm to canvass offers for selling the asset, Beach's chief executive officer Brett Woods said on 12 August, but no offers have yet been fielded.

The significantly delayed 250 TJ/d Waitsia stage 2 project, co-owned with Japanese trading firm Mitsui, will deliver first gas in early 2025, Woods said, reiterating the most recent schedule announced in April for the A$1.2bn-A$1.3bn project.

The Waitsia partners have an agreement with the North West Shelf (NWS) joint venture for processing of 7.5mn t of LNG, originally scheduled to occur between the second half of 2023 and the end of 2028, but the tone from NWS operator Woodside Energy was "supportive" for extending that timeline, Woods said.

First gas from the Thylacine West 1 and 2 wells will flow to the Otway gas plant in July-December, Beach said, following the arrival of pipeline equipment in Australia.

The Adelaide-based firm posted a A$475mn net loss for the 2023-24 fiscal year, down from 2022-23's net profit of A$401mn.

By Tom Major