Beach Energy Warns of Up to A$650 Million Impairment Charge

   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 [e-mail]

(END) Dow Jones Newswires

January 22, 2016 01:16 ET (06:16 GMT)

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