- Shares in Beach Energy (BPT) have slid more than 20 per cent this morning after the company downgraded its full-year production forecast
- In mid-February, the oil and gas producer revealed it had experienced higher-than-expected decline rates at its Bauer field
- Since then, recent results from other oil wells drilled outside Bauer have also come in at the lower end of expectations
- As a result, the company’s pro-forma production guidance for 2021 has been dropped to between 25.2 million and 25.7 million barrels of oil equivalent
- It also withdrew its five-year outlook and said it will no longer provide such guidance in its current form
- After several years of development work, the focus will now shift to the company’s exploration portfolio within the Western Flank
- Shares in Beach Energy are down 20.71 per cent to $1.33
Shares in Beach Energy (BPT) have slid more than 20 per cent this morning after the company downgraded its full-year production forecast.
In mid-February, as part of its half-year results, the oil and gas producer revealed it had experienced higher-than-expected decline rates at its Bauer field, the largest oil field on the Western Flank.
It said the declines were due to interference between the horizontal wells within the McKinlay reservoir and the existing Namur vertical producers, as well as other McKinlay horizontal development wells.
Since then, recent results from oil wells drilled outside Bauer, including the Balgowan, Chiton, Hanson and Kalladeina fields, have also come in at the lower end of expectations.
While no immediate impact on gas production is expected, Beach Energy said oil production from the Western Flank in the 2022 financial year is anticipated to be between four and five million barrels less than previous estimates.
As a result, the company’s pro-forma production guidance for 2021 has been dropped from between 26.5 million and 27.5 million barrels of oil equivalent to between 25.2 million and 25.7 million barrels.
“The past five years has seen the Western Flank outperform our expectations, but we are now witnessing material decline from a number of fields,” said Matt Kay, Managing Director and CEO of Beach Energy.
“This has had a negative impact on our recent production results, as well our FY21 production guidance and Western Flank 2P oil and gas reserves.”
Beach Energy also withdrew its five-year outlook and said it will no longer provide such guidance in its current form.
“This is due to an acknowledgement of continuing variability to the business, which includes adjustments in work programs that were experienced during the COVID-19 pandemic, reductions in the Western Flank oil and gas production profile and variations to project interests as a result of asset acquisitions,” the company said in a statement.
After several years of development work, the focus will now shift to Beach Energy’s exploration portfolio within the Western Flank.
Scheduled for the 2022 financial year, these activities will include infill drilling at existing oil fields, further exploration of the Namur targets, and gas exploration targeting the near-field Patchawarra prospects.
Shares in Beach Energy are down 20.71 per cent to $1.33 as of 1:03 pm AEST.