Beach Energy has made significant progress on its targeted headcount reduction of 30% across its business to achieve efficiency and operational cost improvements under its new CEO.

More than 20% of the targeted headcount reduction will be hit by the end of April, with additional headcount cuts coming through project roll-offs and further organisational structure simplification, Beach Energy said in its quarterly results, released on Wednesday. New executive leadership appointments are underway and will be announced once positions have been confirmed, reported Beach Energy. 

The company's strategic review, under new CEO Brett Woods, is progressing well, and Beach will communicate outcomes before the end of this financial year, noted Woods. 

"Once our business is re-set and strategic goals refreshed, we will be well placed to pursue our progressive dividend policy and the next phase of growth," said Woods.

Results were overshadowed by the delay in the construction of the Waitsia Gas Plant and weather-related impacts on production. 

Woods said "the ongoing emergence of quality issues at Waitsia during the pre-commissioning phase is disappointing, however, review of the contractor's latest schedule is now complete and supports Beach's guidance on capital expenditure and first gas.

"In the Perth Basin, we concluded our operated drilling campaign with pleasing results, including a gas discovery at Redback Deep 1. Three gas discoveries and one gas development well from our operated campaign is an encouraging outcome which will provide valuable backfill volumes.

"In the Otway Basin, regulatory approval was received to allow final construction works at the Enterprise well site. We remain on track to achieve our target of first gas before the end of this financial year, subject to final operating regulatory approvals, meaning a valuable new gas supply source will be available for the East Coast."

Beach Energy has adopted a more cautious approach to investment under new CEO Brett Woods after a couple of years of disappointing financial and operational performance.

Woods, who assumed his position at Beach on January 29 from Santos, told Energy News Bulletin earlier this year that his immediate focus was cutting costs, delivering projects already in the pipeline, and building up a new inventory of exploration targets. 

Third quarter results summary

 

Production up 4% quarter-on-quarter to 4.5 MMboe

• Higher production from the Otway and Taranaki basins, partially offset by weather-affected Cooper Basin 

Perth Basin drilling campaign completed with a gas discovery and a successful development well

• Redback Deep 1 exploration well intersected 28 metres of net pay in the target Kingia reservoir

• Beharra Springs Deep 2 flowed at an average rate of 24 MMscfd over a 72-hour test period

Enterprise regulatory approval received allowing final well site construction works to commence

• Continuing to target first gas in Q4 FY24

Pre-commissioning of the Waitsia Gas Plant and rectification of quality issues continuing

• The operator has concluded risked cost and schedule review for the Watsia Gas Plant construction. The operator's estimate of H2 CY2024 for first gas is within Beach's guidance of early-CY2025, which is being maintained. The review also confirmed Beach's capital expenditure guidance of $600 – 650 million

Kupe South 9 well intervention works underway to identify flow constraints

Inaugural Climate Transition Action Plan released

• Outlines targets and decarbonisation goals aligned with the intent of the Paris Agreement

Moomba CCS project 85% complete and progressing toward first CO2 injection around mid-CY2024

Outcomes of the strategic review to be announced before the end of FY24

• On track to deliver a 30% headcount reduction, with >20% to be achieved by the end of April

• Additional headcount reduction coming through project roll-offs and further organisational structure simplification

FY24 full year guidance updated to reflect year-to-date performance

• Production guidance revised to 18.0 – 18.5 MMboe (previously 18.0 – 20.0 MMboe)

• Capital expenditure toward the upper-end of the $900 – 1,000 million guidance range (no change)