PERTH (miningweekly.com) – ASX-listed Beach Energy has announced an 8% decline in production for the September quarter, to 5.2-million barrels of oil equivalent.

The energy company told shareholders that the decrease in production, compared with the 5.6-million barrels of oil equivalent reported in the previous quarter, resulted from natural field decline and flooding and unplanned outages at its Cooper basin operations.

Sales volumes for the quarter also declined from 5.9-million to 5.3-million barrels of oil equivalent, with revenue declining by 20%, to A$405-million.

“Beach has started the new financial year with strong momentum on delivery of our major projects, with production in the field being challenged from flooding in the Cooper basin and unplanned production outages. We achieved key milestones for our major growth projects in the Otway and Perth basins. These projects differentiate Beach by delivering material growth in production and free cash flow in the near term,” said CEO Morne Engelbrecht.

“On the East Coast, Beach is one of the only gas producers increasing its market share and in doing so we are playing our part in supporting domestic energy security. When connected in mid-2023, the Thylacine wells are expected to increase our East Coast market share by more than 30%. This comes at a time when new gas supply will be much needed.

“On the West Coast, we will soon be the newest entrant to the global liquefied natural gas (LNG) market. Waitsia Stage 2 is progressing towards first LNG sales to BP in the second half of 2023. Beach will be selling up to 200-million British thermal units at attractive LNG prices over roughly five years. This revenue stream will be transformational for Beach and provide fast payback of the project’s capital outlay.

“In addition to these major growth projects, this quarter we will commence gas exploration drilling in the Perth basin, the most exciting exploration play in Australia. We look forward to communicating the results over the next 12 to 18 months of drilling,” Engelbrecht said.

Beach earlier this month completed a prefeasibility study (PFS) on a carbon capture and storage (CCS) opportunity adjacent to its Victorian Otway basin operations, in which it holds a 60% interest, and is now moving into the assess/select phase.

Subject to joint venture approvals, the next phase will refine the PFS, focusing specifically on storage capacity, reservoir selection, injectability, integration and environmental approvals to establish a facility that can capture 200 000 t/y carbon dioxide-equivalent (CO₂e), an amount that would be greater than Beach’s current Otway basin scope 1 and 2 emissions combined.

The assess/select stage is anticipated to be completed by the end of 2023. Later stages will examine the potential for the facility to become a regional hub for third-party CO₂ sequestration.

“Our Victorian Otway operations are vital for the energy needs of Australia’s east coast market, so it is a logical next step for CCS investigations,” Engelbrecht said.

“From Beach’s perspective, CCS is just the beginning, and while proudly an oil and gas exploration and production company, we know that we must do more to modernise our role as an energy producer in the twenty-first century.

“Our focus on assessing new energy opportunities has gained momentum and where we can use our existing infrastructure and create value for stakeholders, Beach intends to participate. We are currently assessing a number of opportunities, including hydrogen in Victoria, wind energy in New Zealand and other future fuels in the Cooper basin, and I believe all can play an important role in the future energy mix. These new energy opportunities are incurring minimal spend at present while feasibility studies are progressed.”