bullish on future of cooper basin

Beach bullish on future of Cooper Basin

by: PAUL GARVEY
From: The Australian
July 31, 2013 12:00AM

THE Cooper Basin -- once written off by investors as a mature oil and gas province past its prime -- could soon become the biggest oil production hub in Australia, Beach Energy chief executive Reg Nelson says.

Beach yesterday overtook Santos to emerge as the biggest single oil producer in the Cooper Basin thanks largely to higher output from the basin's western flank, where Beach has been investing in new field developments.

Mr Nelson, who has long been an advocate for the Cooper, noted that the basin had produced about 2.3 million barrels of oil in the last quarter, putting it ahead of Western Australia's North West Shelf and just behind the offshore Gippsland Basin. "With offshore Gippsland potentially declining and the Cooper Basin increasing, I think the Cooper could well become the biggest oil producing region in the country in a very short time," Mr Nelson told The Australian.

So-called unconventional oil and gas is set to play an increasingly large part in the basin's future, with US energy giant Chevron recently agreeing to invest up to $US349 million to explore the unconventional potential of two of Beach's Cooper Basin licences.

Adelaide-based Beach yesterday said it expected to produce between 8.7 million and 9.3 million barrels of oil equivalent in the 2014 financial year, up from the eight million barrels of oil equivalent produced by the company in financial 2013.

The increase in the coming year will be driven by more output out of the Cooper as well as increased production out of Beach's Abu Sennan joint venture in Egypt.

The company also plans to invest between $420m and $480m in capital expenditure in the coming year, including up to $200m in exploration.

Mr Nelson said Beach would be able to fund its spending commitments out of its increasing cashflow, its $348m in cash holdings and a $150m debt facility.

Beach produced 2.2 million barrels of oil equivalent in the June quarter and generated a record $199.7m in revenue. Full year revenue was also a record, coming in at $698m.

Shares in Beach closed 2c higher at $1.35.