Eregulla Deeps, page-72

Strike mentioned.

Brett Woods ‘confident’ in Beach Energy after shares slide 12.6 per centMatt MckenzieThe West AustralianMon, 12 August 2024 3:22PM

Beach Energy boss Brett Woods says the State Government should let more onshore gas hopefuls access export markets, ahead of a major energy inquiry to be released this week.A parliamentary committee has been mulling a shakeup of the rules governing how much gas must be reserved for the local market, amid warnings of a looming shortage.Offshore producers need to set aside about 15 per cent, with critics arguing the spirit of the rule is not being met in some cases.Onshore businesses in the Perth Basin must dedicate all their gas to local supply, with Beach Energy & Mitsui’s Waitsia securing an exemption when the policy was introduced in 2020.Mr Woods said it “makes sense” to allow other projects access to export markets.Overseas gas buyers will generally pay a much higher price than local customers, supporting the economics of investment into big projects.

In Waitsia’s case, the export allowance helped the partners make a final investment decision, Mr Woods said.He said onshore producers should have the same opportunity as offshore companies to get value out of exports, but added there must also be an assurance that local supply was sufficient.Some Perth Basin players have run the rule over value-adding projects to get a higher end price for their gas.Strike Energy boss Stuart Nicholls has warned the local reservation scheme was effectively a subsidy for foreign-owned manufacturers in WA.A fellow Perth Basin company, Strike wants to build a gas peaking power station in the Mid West to get more value from gas, recently dropping a planned fertiliser project.When asked whether Beach would consider a similar move, Mr Woods said it was under consideration in WA, although plans on the east coast were further progressed.The Australian Energy Market Operator has warned the State could face a major shortage of power within a decade with publicly-owned coal plants slated for closure.Mr Woods said there would be a need for gas power if the State embraced a big build of solar and wind.“Gas is the classic partner for renewables,” Mr Woods said.But he added that gas should not be used for baseload power because the fuel has higher value purposes, including manufacturing pharmaceuticals and construction materials.“It’s too valuable for baseload,” he said — adding renewables were better placed.Shares in Beach Energy fell 12.6 per cent on Monday after news the company had downgraded reserves at the new Enterprise gas field in Victoria.The Adelaide-based business reported a $476 million loss for the year to June driven by almost $1.1 billion of previously flagged writedowns.Production fell 7 per cent amid field decline and weather events, although revenue lifted 9 per cent to $1.8 billion.Beach moved in recent months to cut costs, reduce headcount and focus on core assets following a major strategic review.The latest financials coincided with a move to cut estimated reserves at the Enterprise field by about 12 million barrels of oil equivalent.Mr Wood said that followed declining pressure in the wells, which signalled the reservoir was smaller than first thought.Waitsia’s time frame had also slipped behind the most optimistic forecasts yet was still within the company’s buffer, he said.But he told The West Australian he was confident the company had hit the bottom.“I’ve put the ruler over all the assets,” he said.“I feel much more confident with where we’re going today.”Seven Group is a major shareholder in Beach Energy and Seven West Media — publisher of The West Australian.