From The Australian. Yeah wont be happy if BPT pull that crap....

From The Australian. Yeah wont be happy if BPT pull that crap.

Long-held ambitions for Cooper Basin shale gas are likely to remain unrealised despite expected high gas prices, with Beach Energy slashing official contingent resources by 500 million barrels of oil equivalent.
The news of the resource downgrade, which leaves the Nappamerri Trough Natural Gas venture with no resource or reserves, came as Beach logged its second straight full-year net loss yesterday but slightly beat market expectations on underlying profit.
Beach’s new chief Matt Kay said that despite the company’s buoyant outlook for gas prices and strong balance sheet, the technical challenges of getting shale from the Cooper Basin in Central Australia appeared too great to overcome.
“It’s a challenging proposition for us and everyone else as well,” Mr Kay said of Cooper shale.
“We had a very good look at the results from our previous drilling campaign and studies and we just felt it’s pretty challenging to commercialise — it’s very high cost to go up and try to crack the code.”
Shale gas production in the Cooper through fracking was once flagged as a potential game-changer that could replicate the success of shale gas and oil in the US. In 2013, Chevron agreed to spend up to $US349m drilling for shale gas on Beach ground in the Cooper, but opted out last year after unconvincing results and the global oil price slump.
“Analysis of the results demonstrated that the high cost of addressing fundamental technical issues means the NTNG project is unlikely to be developed commercially in the medium term,” Beach said.
For the year to June 30, Beach reported a net loss of $588.8m, against $514.1m loss the previous year. The result was driven by previously announced impairments of $635m, chiefly Cooper Basin assets but also the NTNG venture.
Underlying earnings slumped 61 per cent to $35.7m, beating expectations of $31m. The company lowered its cash break-even oil price level by 60 per cent to $US26 a barrel, because of cost cutting and lower capital commitments at the Santos-operated Cooper Basin joint venture.
Beach flagged further cost cuts of more than 15 per cent at the Cooper Basin this year.
“We have reshaped our business to be resilient to low prices and we are also one of the most leveraged companies to an oil price recovery,” Mr Kay said. The group declared a fully-franked final dividend of 0.5c. This brought the full-year dividend to 0.5c, down from 3c last year.
Mr Kay said the company still remained focused on using its $199m of cash and $350m of unused debt facilities to chase acquisitions, although he was in no rush. “We’re looking at a number of opportunities and have a strong balance sheet when a number of our peers don’t,” he said.
Mr Kay said east coast gas prices were set to continue to rise as a shortage of gas to supply growing LNG production at Gladstone was set to worsen.