November 26, 2015 12:30am
Christopher RussellThe Advertiser
Beach Energy chairman Glenn Davis. Picture: Dylan Coker.
BEACH Energy is “up for the challenge” of weathering the low oil price environment and positioning itself for rapid growth when prices rebound, chairman Glenn Davis said.
Beach has contracted back to focus on its core in the Cooper Basin, reducing capital expenditure and ensuring the balance sheet is robust so it can pounce on opportunities.
Realised oil price in $US terms fell 35 per cent in the year, affecting earnings.
“Despite this, we ended the year in a strong financial position, with cash of $170 million, drawn debt of $150 million and available debt facilities of $150 million,” Mr Davis said.
Beach is in the process of merging with Drillsearch to consolidate Cooper Basin assets and make gains from synergies once it takes place in February. Asked by shareholders whether Drillsearch was getting a better deal because of a premium in the all-scrip deal, Mr Davis said Beach had had to offer a premium to persuade the Drillsearch board to recommend the merger.
The Beach board believed the offer was fair to both sides on numerous metrics and would be value accretive for Beach shareholders. It would give Beach scale, enhancing its attractiveness for investors and improving operations.
DLS Price at posting:
64.0¢ Sentiment: Buy Disclosure: Held
