Adelaide headquartered Beach Energy’s sales revenue has plummeted 43 per cent in an environment of tumbling oil prices.
The central Australia Cooper Basin producer collected $130.7 million in sales revenue during the three months to March, down from $231.3 million a year ago.
But sales volumes of 2.2 million barrels of oil equivalent were only five per cent less than the 2014 March quarter, although they were down 23 per cent on the December quarter.
Traders have reacted negatively, sending the share price down 3.25 cents, or 2.73 per cent, to $1.158 by 1150 AEST.
The company has cut spending in the weaker oil price environment, forking out only $79.5 million on capital expenditure for the quarter, down 38 per cent on a year ago and 47 per cent on the December quarter.
It’s also cut interest costs by redeeming $150 million in convertible notes by using a cheaper bank debt facility.
“Beach’s objective is to prudently manage liquidity in line with a lower oil price environment to ensure the FY16 capital expenditure program is fully funded from cash reserves and operating cash flows,” the company said.
The company realised an average oil price of $A71 a barrel for the quarter, compared to $86.80 in the December quarter and $124.80 in last year’s March quarter.
New chief executive Rob Cole has hinted the company is considering asset sales and looking for a new partner after Chevron abandoned its shale gas joint venture.
The company received high profile support during the period with billionaire Kerry Stokes spending $179 million to become its biggest shareholder with a 13.8 per cent stake.
Beach, which switched leadership to Cole in March, said the fall in sales was primarily due to lower oil production, lower gas demand and an increase in planned downtime at the Moomba gas processing facility.
The fall in revenue to $131 million was “due to a combination of lower realised oil prices and lower sales volume”.
Beach reduced capital expenditure significantly in the quarter – down 47 per cent. It expects a major reduction in capital expenditure in the 2016 financial year.
“The expected reduction in capital expenditure is consistent with Beach’s objective to fully fund the FY16 program from cash reserves and operating cash flows,” the company said in a statement.
– with AAP
