Beach Energy Warns of Up to A$650 Million Impairment Charge
22 January 2016 - 5:31PM
Dow Jones News
By David Winning
SYDNEY--Beach Energy Ltd. (BPT.AU) said it would take impairment
charges of up to 650 million Australian dollars (US$456 million),
joining the ranks of Australian oil and gas companies writing down
assets due to the global oil-price rout.
Beach Energy said the impairment charges would mostly be taken
against its non-operated oil and gas assets in the Cooper Basin, a
swathe of the Australian Outback that straddles Queensland and
South Australia states.
It comes after BHP Billiton Ltd. (BHP.AU) and Woodside Petroleum
Ltd. (WPL.AU) signaled writedowns of US$7.2 billion and up to
US$1.2 billion, respectively, due to the slumping oil price that
earlier this week fell below US$27 a barrel for the first time in
more than a decade. Earlier Friday, Santos Ltd. (STO.AU) said it
would also take impairment charges in its first-half accounts due
for release next month, without being more specific.
"Despite lower oil prices, over the past six months we have held
our net cash position relatively constant, secured increased debt
financing facilities on improved terms, and identified up to A$40
million of second-half savings and deferrals in our capital
program," Neil Gibbins, Beach Energy's acting chief executive,
said.
Beach Energy said it now expected capital spending of between
A$180 million and A$210 million in its fiscal year through June,
down from a previous estimate of up to A$270 million. Its cash
balance stood at A$164 million at the end of last month, supported
by undrawn debt.
The company also narrowed its outlook for oil and gas production
in the current financial year to between 8.0 million and 8.6
million barrels of oil equivalent. Its previous guidance had
included a lower-end target of 7.8 million barrels of oil
equivalent.
-Write to David Winning at david.winning@wsj.com
(END) Dow Jones Newswires
January 22, 2016 01:16 ET (06:16 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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