Perth, Aug 1, 2008 AEST (ABN Newswire) - Beach Petroleum Limited (ASX:BPT)(PINK:BEPTF) has pushed its annual oil and gas revenue to above half a billion dollars for the first time.
The Company today announced record full year oil and gas revenue of A$564 million for the 12 months to 30 June 2008.
The result is 20% higher than the $472 million revenue achieved by the Australian energy group in the previous financial year.
The 2007-2008 full year result was buoyed by a record June quarter which saw Beach's oil and gas revenue climb to $167.4 million for the period - a 13% stronger performance than in the March quarter this year.
The June quarter revenue boost reflected higher volumes and prices for gas and gas liquids as well as global rises in the oil price.
Despite scheduled maintenance downtimes on its 30% interest in the Basker Manta Gummy (BMG) project offshore Gippsland Basin, the 20% jump in Beach's Cooper Basin oil production (a record 1.95 million barrels) helped hold total group production virtually steady for the latest 12 months.
The Company closed out the latest year with full year production of 9.3 million barrels of oil equivalent (mmboe) compared with 9.43 mmboe in 2006-2007.
Latest full year sales eased 8% to 9.73 mmboe (10.54 mmboe in 2007) - the result simply due to the timing of three oil shipments made this month after the quarter which will be reflected in results for the forthcoming September quarter.
Beach achieved an average realized oil price pre-hedging for 2007-2008 of A$111 per barrel or 30% higher than the average price of A$86 barrel for the previous year.
The June quarter included a record oil price received for Beach of an average A$135 per barrel, driven by an increasingly higher proportion of the Company's oil sales being aligned with Tapis pricing - one of the world benchmarks for global petroleum price fixing.
During the quarter, Beach increased its exposure to the higher spot oil price spikes globally by closing out a significant portion of its oil hedge book for the next six months - freeing up immediately the potential to sell up to 90% of its oil sales into spot markets.
"The upside of this decision is to unlock the Company from the shackles of hedge obligations based on lower West Texas Intermediate (WTI) pricing to capture the stronger performing Tapis benchmark pricing," Beach's Managing Director, Mr Reg Nelson said today.
"The differential between WTI and Tapis has historically always been very close but over the past year or so, the Tapis-WTI differential has now stretched to levels reaching up to between US$10 to US$15/bbl in favour of Tapis," Mr Nelson said.
"That is a significant margin difference and has to be fully accommodated in our forward sales and revenue momentum in 2008-2009," Mr Nelson said.
"On average during the past year, Beach received in excess of US$4/bbl above WTI prices and a large portion of our oil sales were at times at a premium to Tapis so we will look to build on this further for the current full year."
Mr Nelson said only 954,000 barrels of Beach's oil inventory now remained hedged, with this "18-month hedge tail" able to be closed out by December next year.
The inventory is hedged at an average capped price of US$79/bbl and represents less than 15% of the Company's forecast sales for the full 2008-2009 financial year
The quarter also saw the Company enter into agreements to acquire interests in Egypt with considerable upside to Beach. The offshore North Shadwan concession contains three oil discoveries, with Proved and Probable recoverable reserves of approximately 40 million barrels (8 mmb, net to Beach) and development expected in 2009, while the offshore South East July concession contains several attractive oil prospects, one of which will be evaluated by the July South-1 exploration well in the fourth quarter of 2008.
Contact
Reg Nelson
Beach Petroleum
TEL: +61-8-8338-2833
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