Managing director Rob Cole announced yesterday the company would reduce capex by as much as 40 per cent in FY16 to between $240 and $270 million in the hope of retaining its favourable liquidity profile.
Unconventional gas will see the largest reduction in resources with the company earmarking just $5 million for exploration, down from $60 million in FY15.
The company’s total exploration bill of $131 million is expected to be halved.
“The recent industry”?wide focus on preserving cash reserves and liquidity has seen reduced drilling activity across the Cooper Basin and lower expectations for near”?term production profiles,”? a statement published yesterday said.
“Accordingly, the FY16 production guidance range of 7.8 to 8.6 MMboe reflects the impact of natural field decline and curtailed drilling activity.”?
The company expects the reduced spending measures to be complimented by higher gas sales in FY16.
“Capital expenditure The FY16 capital expenditure program has been prepared under the assumption of a continuing lower oil price environment, with a focus on preserving cash reserves and maintaining liquidity.”?
Beach Energy’s revised expenditure program was released with the company’s latest quarterly report.
The company saw an 8 per cent rise in production during the three months ending June 30, to 2.3 MMboe reportedly due to higher Western Flank oil and non-operated gas production.
For the full FY15, Beach Energy production reached 9.2 MMboe.