PERTH (miningweekly.com) – ASX-listed Beach Energy has lowered both its capital spend and production expectations for the 2016 financial year, as low oil prices impacted the company’s bottom-line.

Beach on Wednesday said the 2016 capital expenditure (capex) programme had been prepared under the assumption of a continuing lower oil price environment, with the company focusing on preserving cash reserves and maintaining liquidity.

Capex of between A$240-million and A$270-million would be invested in 2016, compared with the A$416-million spent in the 2015 financial year.

Exploration expenditure would reduce from the A$131-million spent in 2015 to between A$50-million and A$60-million, while development expenditure would decline from A$285-million to between A$190-million and A$210-million.

Accordingly, the full-year production guidance for 2016 also declined to between 7.8-million and 8.6-million barrels of oil equivalent, reflecting the impact of natural field decline and curtailed drilling activity.

Beach produced 9.2-million barrels oil equivalent in the 2015 financial year.

For the quarter ended June, Beach produced some 2.3-million barrels of oil equivalent, an 8% increase on the previous quarter, owing to higher oil and nonoperated gas production from the Western Flank.

The miner also reported increased production from its Egyptian asset of 61 000 barrels of oil equivalent, following the commissioning of the El Salmiya gas pipeline.

Sales volumes for the quarter were up 16% on the March quarter, to 2.6-million barrels of oil equivalent, owing to the higher production and increased customer demand for gas sales.

For the full 2015, gas sales volumes reached 10.5-million barrels of oil equivalent, which was marginally below the record 10.8-million barrels of oil equivalent achieved in 2014.

Total sales revenue for the quarter ended June was up 30% on the March quarter, to A$170-million, while full-year sales revenue reached A$728-million, which was down significantly from the A$1.05-billion achieved in 2014.

Despite the lower production volumes expected in 2016, Beach expected gas sales volumes for the financial year to be higher than those achieved in 2015, as a result of a likely draw-down from storage.