SA oil and gas companies report a difficult start to FY21

Adelaide-based oil and gas companies, Beach Energy and Cooper Energy, reported a sharp drop in profits in the first half of the fiscal year, citing low prices and investment in new projects due to their great performance.

Beach Energy’s net profit for the first half of fiscal year 2021 more than halved to $ 129 million from last year’s figure, thanks to a 38 percent drop in realized oil prices.

The price cut due to the coronavirus pandemic also led to a 22 percent drop in sales revenue to $ 705 million, despite production levels remaining at 13.4 million barrels of oil equivalent (mmboe) by half.

Adelaide-based oil prices fell to $ 64.90 a barrel from $ 104.60 in the first half of FY20. However, its average realized gas price rose 2 percent to $ 7.17 in the same period.

With a market capitalization of about $ 4 billion, Beach is the fourth largest state-owned company with a public list behind Santos, Argo Investments and Oz Minerals.

The reported 54 percent drop in NPAT was partially offset by a 7 percent drop in operating costs, lower license fee payments due to lower oil prices, and reduced taxation as a result of lower profits.

Approximately 54 percent of Beach Energy’s production for half was gas, oil made up a third, while other liquids made up the rest.

For six months until December 31, Beach has made a final investment decision for Phase 2 of the 250 Terajoule (TJ) Waitsia Gas project a day, which it says will allow it to enter the global LNG market in 2023.

He also announced two acquisitions during the fall, including Cooper Basin Senex Energy’s portfolio and Mitsui’s Bass Basin assets.

West-side oil production increased by about 8 percent in the corresponding period following the FG20 drilling program, in which 27 horizontal oil wells were drilled across the west-side oil fields. But higher rates of decline were recorded than expected in a number of wells, prompting an investigation to inform about the optimal production strategy.

Beach Energy CEO Matt Kay said the company’s first half of the year brought key milestones in the portfolio despite poor West Bay oil field performance.

“When you look at what has happened in the past six months, it is extremely gratifying to see that we have well and truly laid the foundations for growth,” he said.

“You can’t look back in half every day and say you’ve achieved FID in a Waitsia-sized LNG project, delivered liquid-rich material discovered in the Otway Basin, and made two value-added acquisitions.”

“Growth is happening on the beach and it’s happening in our strategically diverse asset portfolio.”

Beach Energy will pay a dividend of 1 cent per share on March 31.

The company’s stock price reached $ 2.16 about 12 months ago, before falling to $ 0.97 in late March, and recovered again last month and touched $ 2.

Shares on the beach opened this morning for $ 1.68.

A South Australian counterpart, oil and gas company Cooper Energy, announced a baseline post-tax loss of $ 17.4 million for the first half of FY21.

The result was successful despite an 82 percent increase in sales volume to 1.2 mm boe and a 24 percent increase in sales revenue to $ 48.6 million over the six-month period.

However, in yesterday’s announcement to ASX, the company said it recorded $ 7.6 million in costs for APA’s share of revenue from gas produced at the Sole gas field and sold on the spot, and $ 3.1 million in costs for Cooper’s share in related operating business costs.

It also spent $ 11.2 million on the reconfiguration and commissioning of the poorly performing Orbost gas processing plant.

These costs are expected to be significantly lower in the second half of the financial year.

Cooper Energy CEO David Maxwell said 2020 was challenging, but that it was an encouraging start to 2021.

“The signing of the transition agreement with APA and the subsequent reconfiguration of the Orbost gas processing plant were key milestones in the first half of FY21,” he said.

“This has allowed us to start supplying under our Sole gas sales contracts, providing a material increase in sales volume, realized prices and cash flow.”

Shares of Cooper Energy traded at $ 0.30 this morning, nearly half of $ 0.55 at 12 months earlier.

Santos reported yesterday ahead of allegations of a $ 971 million ($ 756 million) tax cut due to lower oil price assumptions.

It also reported a decrease in goodwill of 125 million US dollars (98 million US dollars) as a result of the audit of reindeer reserves in Western Australia.

Santos will announce its year-round results on Thursday.

Meanwhile, the mining giant BHP this morning reported a corresponding profit of 4.98 billion US dollars (3.88 billion US dollars) for the semester ended December 31, which is less than 6.25 billion US dollars (4.87 billion US dollars). dollars) profit for the same period in 2019.

The 20 percent drop in profit reflected a $ 1.3 billion ($ 1 billion) impairment charge on its NSW thermal coal assets, which in part reflected the softer “current market conditions for thermal coal.” This and other coal assets are for sale.

But excluding the charge, base earnings rose a solid 16 percent to $ 7.8 billion ($ 6 billion) thanks to the results of stars in their iron ore and copper divisions.

BHP’s South Australia Copper / Gold / Uranium Mine on the Olympic Dam returned a half-yearly profit of $ 100 million ($ 78 million), a major turnaround from the loss of $ 83 million reported in half a year. completed on December 31, 2019.

It was the best half of the production in the SA mine in five years.

The BHP board announced a record semi-annual dividend of $ 1.30 ($ 1.01) per share.

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