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Beach Energy Ltd is laying off 30 percent of its workforce as it undergoes a strategic review.
The Adelaide-based company said it completed the first stage of its “comprehensive strategic review” and will implement a new asset-based organizational structure by April 8, according to a recent announcement on the Australian Securities Exchange.
Several members of its current executive team will also be leaving the company in the coming months, the company said. “New executive leadership appointments are underway and will be announced once all positions have been confirmed”, it said, adding that further results from the strategic review will be announced over the coming months.
Beach Managing Director and CEO Brett Woods said, “Our new organizational structure will bring sharpened focus on our core assets as we strive to become a dominant supplier of gas into Australia’s East Coast and West Coast markets”.
“It is imperative that Beach regains its status as a safe and efficient, low-cost operator by achieving structural reductions in operating costs and sustaining capital expenditure, including the announced reduction in headcount,” Woods continued.
“Decisions about headcount reductions are not made lightly as we are highly cognizant of the personal impact organizational change can have on individuals and their families. To minimize the personal impact, we are committed to implementing the new structure as soon as possible,” he concluded.
First Half Results
In the Beach’s recent results, it reported production of 8.8 million barrels of oil equivalent (MMboe) for the first half of its fiscal year 2024, which is down 11 percent year over year. The decrease was largely driven by customer gas nominations, the company said.
In the same period, Beach posted sales revenue of $613.88 million (AUD 941 million), up 16 percent year over year, supported by the first Waitsia LNG and condensate cargoes.
Woods said in an earlier statement, “It is a privilege to have joined Beach at what is an exciting time for the company. We are close to completing major projects which will deliver material volumes of new gas supply to domestic and global markets. This near-term growth outlook and our sound financial position sets us apart from our peers”.
“The past six months saw several milestones achieved. On the East Coast, we were pleased to conclude negotiations with Origin for the Otway Basin price review and a new agreement for the sale of Enterprise gas. Our Otway Basin arrangements now provide greater certainty for increasing production and higher prices in [calendar year] 2024 and beyond”, Wood noted.
“In the West, the first Waitsia LNG cargo and a one-off Waitsia condensate cargo were key highlights. While construction of the Waitsia Gas Plant continues, our strategy to mitigate past challenges by storing surplus gas from the Xyris Gas Plant allowed us to fill an early LNG [liquefied natural gas] cargo and benefit from strong market prices”, he continued.
“Drilling and connection activities continued in the Cooper Basin. In the Cooper Basin JV, we participated in 45 wells with an overall success rate of 91 percent, including two oil and two gas discoveries. In the Western Flank, we connected seven new wells and completed the FY24 drilling campaign, which included two oil discoveries”, he added.
Wood also noted that the Moomba carbon capture and storage project, one of the nation’s largest emissions reduction projects, is targeting its first carbon dioxide injection in mid-2024.
“With new gas supply coming to market in [calendar year] 2024 from Kupe, Enterprise, Waitsia and Thylacine West, Beach is poised for an exciting year ahead. We remain focused on delivering on our promises to create sustainable value for our shareholders,” Woods said.
To contact the author, email rocky.teodoro@rigzone.com
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